Enhancement of tyrosine phosphorylation in cells by the application of pervanadate, an extremely potent phosphotyrosine phosphatase inhibitor, provokes the rapid metalloprotease-dependent cleavage of ErbB-4, a transmembrane receptor tyrosine kinase. The pervanadate-induced proteolysis occurs in NIH 3T3 cells expressing transfected human ErbB-4 and in several cell lines that express endogenous ErbB-4. One product of this proteolytic event is a membrane-anchored molecule of approximately 80 kDa, which is heavily tyrosine phosphorylated and which possesses tyrosine kinase catalytic activity toward an exogenous substrate in vitro. This response to pervanadate is not dependent on protein kinase C activation, which has previously been demonstrated to also activate ErbB-4 cleavage. Hence, the pervanadate and 12-O-tetradecanoylphorbol-13-acetate-induced proteolytic cleavage of ErbB-4 seem to proceed by different mechanisms, although both require metalloprotease activity. Moreover, pervanadate activation of ErbB-4 cleavage, but not that of 12-O-tetradecanoylphorbol-13-acetate , is blocked by the oxygen radical scavenger pyrrolidine dithiocarbomate. A second phosphotyrosine phosphatase inhibitor, phenylarsine oxide, also stimulates a similar cleavage of ErbB-4 but, unlike pervanadate, is not sensitive to pyrrolidine dithiocarbomate. Last, pervanadate is shown to stimulate the proteolytic cell surface processing of a second and unrelated transmembrane molecule: the precursor for amphiregulin, an epidermal growth factor-related molecule. Amphiregulin cleavage by pervanadate occurred in the absence of a cytoplasmic domain and tyrosine phosphorylation of this substrate.