EphB4 is a member of the Eph receptor tyrosine kinase family shown to act in neuronal guidance and mediate venal/arterial separation. In contrast to these more established roles, EphB4's function in cancer is much less clear. Here we illustrate both tumor promoting as well as suppressing roles of EphB4, by showing that its activation resulted in inhibition of the Ras/ERK pathway in endothelial cells but activation of the same pathway in MCF-7 breast cancer cells. This was true if EphB4 was stimulated with EphrinB2, its natural ligand, or an agonistic monoclonal antibody for EphB4. Correspondingly, EphB4 activation stimulated MCF7 growth while inhibiting HUVEC cell proliferation. The reason for these dramatic differences is due to functional coupling of EphB4 to different downstream effectors. Reduction of p120 RasGAP in HUVEC cells attenuated the inhibitory effect of EphB4 activation on the ERK pathway, whereas knockdown of PP2A in MCF7 cells attenuated EphB4 activation of the ERK pathway. This represents the first time a functional coupling between Eph receptor and PP2A has been demonstrated leading to activation of an oncogenic pathway. Our study illustrates the caveats and potential challenges of targeting EphB4 for cancer therapy due to the conflicting effects on cancer cell and endothelial cell compartments.