Disruption of intestinal epithelial homeostasis, including enhanced apoptosis, is a hallmark of inflammatory bowel disease (IBD). We have recently shown that tumor necrosis factor (TNF) increases the kinase activity of ErbB4, a member of the epidermal growth factor receptor family that is elevated in mucosa of IBD patients and that promotes colon epithelial cell survival. In this study, we tested the hypothesis that TNF transactivates ErbB4 through TNF-α converting enzyme (TACE)-mediated ligand release and that this transactivation is necessary to protect colonic epithelial cells from cytokine-induced apoptosis. Using neutralizing antibodies, we show that heparin-binding EGF-like growth factor (HB-EGF) is required for ErbB4 phosphorylation in response to TNF. Pharmacological or genetic inhibition of the metalloprotease TACE, which mediates HB-EGF release from cells, blocked TNF-induced ErbB4 activation. MEK, but not Src or p38, was also required for transactivation. TACE activity and ligand binding were required for ErbB4-mediated antiapoptotic signaling; whereas mouse colon epithelial cells expressing ErbB4 were resistant to TNF-induced apoptosis, TACE inhibition or blockade of ErbB4 ligand binding reversed the survival advantage. We conclude that TNF transactivates ErbB4 through TACE-dependent HB-EGF release, thus protecting colon epithelial cells from cytokine-induced apoptosis. These findings have important implications for understanding how ErbB4 protects the colon from apoptosis-induced tissue injury in inflammatory conditions such as IBD.