Amphiregulin (AR), a member of the EGF family, is synthesized as a type I transmembrane protein precursor (proAR) and expressed on the cell surface. Shedding of proAR yields a transmembrane-cytoplasmic fragment (AR-CTF), as well as a soluble AR. Here we demonstrate that the proAR-shedding stimuli trigger endocytosis of both AR-CTF and un-shed proAR. ProAR translocates from the plasma membrane to the inner nuclear membrane, whereas AR-CTF is translocated to the lysosome via retrograde membrane trafficking. Nuclear envelope localization of proAR involves truncation of the C-terminus, which subsequently activates the ER-retrieval signal. The truncated form of proAR interacts with A-type lamin and is retained at the inner nuclear membrane. Heterochromatin formation is then induced and global transcription is transiently suppressed. This study gives new insight into epigenetic chromatin organization in mammalian cells: a plasma-membrane-anchored growth factor is targeted to the inner nuclear membrane where it participates in dynamic chromatin organization and control of transcription.