ErbB3 has been shown to bind the ligands heregulin and NRG-2. Ligand binding causes a change in conformation that allows for dimerization, phosphorylation, and activation of signal transduction. ErbB3 can heterodimerize with any of the other three ErbB family members. The theoretical ErbB3 homodimer would be non-functional because the kinase-impaired protein requires transphosphorylation by its binding partner to be active.

Unlike the other ErbB receptor tyrosine kinase family members which are activated through autophosphorylation upon ligand binding, ErbB3 was found to be kinase impaired, having only 1/1000 the autophosphorylation activity of EGFR and no ability to phosphorylate other proteins. Therefore, ErbB3 must act as an allosteric activator.