Heparin-binding EGF-like growth factor (HB-EGF), a member of the EGF-family, is thought to be important for keratinocyte functions. HB-EGF is first synthesized as a membrane-anchored form, and its soluble form is released by ectodomain shedding. Here we investigate the role of HB-EGF in epidermal hyperplasia induced by all-trans retinoic acid (tRA) treatment. HB-EGF is normally expressed in epidermis of normal adult mice at very low levels, but topical tRA treatment results in epidermal hyperplasia, concomitant with the strong induction of HB-EGF expression in the suprabasal layer. tRA-induced epidermal hyperplasia was reduced both in the keratinocyte-specific HB-EGF null mice (K5-HB(del/del)) and knock-in mice expressing the uncleavable mutant form of HB-EGF (HB(uc/uc)), as compared with wild-type HB-EGF knock-in mice (HB(lox/lox)). Among ErbB tyrosine kinase receptors, EGF receptor (EGFR) and ErbB2 were selectively activated by tRA treatment in skin from wild-type mice, while the activation of these ErbB receptors was significantly reduced in the skin of HB-EGF null mice. These results indicate that expression of HB-EGF and generation of its soluble form, followed by activation of EGFR and ErbB2, are pivotal processes in tRA-induced epidermal hyperplasia.