ErbB2 is differentially overexpressed in tumor versus host tissues, suggesting that an autoregulation mechanism may modulate the expression of ErbB2 and control cell growth. A truncated ErbB2 extracellular domain, herstatin has been shown to bind to ErbB2 and inhibit the growth of tumor cells expressing ErbB2. In the present study, the interaction of herstatin and ErbB2 in vivo was observed by confocal microscopy. The aggregation of ErbB2 and herstatin was found in endoplasmic reticulum (ER). The decrease of ErbB2 on the cell surface was accompanied with the increased colocalization of ErbB2 and herstatin in the cytoplasm, suggesting that the formation of ErbB2/herstatin complex may prevent transit from ER to cell surface of ErbB2. The formation of ErbB2 and herstatin complex was further confirmed by immunoprecipitation. The results demonstrate that sequestering ErbB2 molecules intracellularly by herstatin may be a possible mechanism of the cell growth inhibition.