Abstract Heparin-binding epidermal growth factor-like growth factor (HB-EGF) has been shown to stimulate the growth of a variety of cells in an autocrine or paracrine manner. Although HB-EGF is widely expressed in tumors compared with normal tissue, its contribution to tumorigenicity is unknown. HB-EGF can be produced as a membrane-anchored form (pro-HB-EGF) and later processed to a soluble form (s-HB-EGF), although a significant amount of pro-HB-EGF remains uncleaved on the cell surface. To understand the roles of two forms of HB-EGF in promoting tumor growth, we have studied the effects of HB-EGF expression in the process of tumorigenesis using in vitro and in vivo systems. We demonstrate here that in EJ human bladder cancer cells containing a tetracycline-regulatable s-HB-EGF or pro-HB-EGF expression system, s-HB-EGF expression increased their transformed phenotypes, including growth rate, colony-forming ability, and activation of cyclin D1 promoter, as well as induction of vascular endothelial growth factor in vitro. Moreover, s-HB-EGF or wild-type HB-EGF induced the expression and activities of the metalloproteases, MMP-9 and MMP-3, leading to enhanced cell migration. In vivo studies also demonstrated that tumor cells expressing s-HB-EGF or wild-type HB-EGF significantly enhanced tumorigenic potential in athymic nude mice and exerted an angiogenic effect, increasing the density and size of tumor blood vessels. However, cells expressing solely pro-HB-EGF did not exhibit any significant tumorigenic potential. These findings establish s-HB-EGF as a potent inducer of tumor growth and angiogenesis and suggest that therapeutic intervention aimed at the inhibition of s-HB-EGF functions may be useful in cancer treatment.