Two different signalling pathways mediate the localization of acetylcholine receptors (AChRs) to synaptic sites in skeletal muscle. The signal for one pathway is agrin, a protein that triggers a redistribution of previously unlocalized cell surface AChRs to synaptic sites(1). The signal for the other pathway is not known, but this signal stimulates transcription of AChR genes in myofibre nuclei near the synaptic site(2). Neuregulins, identified originally as a potential ligand for erbB2 (Neu differentiation factor, NDF)(3), stimulate proliferation of Schwann cells (glial growth factor, GGF)(4), increase the rate of AChR synthesis in cultured muscle cells (AChR-inducing activity)(5) and are expressed in motor neurons(4,5). These results raise the possibility that neuregulin is the signal that activates AChR genes in synaptic nuclei. Here we show that neuregulin activates AChR gene expression in C2 muscle cells and that the neuregulin response element in the AChR delta-subunit gene is contained in the same 181 base pairs that confer synapse-specific expression in transgenic mice. We use antibodies to show that neuregulins are concentrated at synaptic sites and that, like the extracellular signal that stimulates synapse-specific expression, neuregulins remain at synaptic sites in the absence of nerve and muscle. We show that C2 muscle cells contain erbB2 and erbB3 messenger RNA but little or no erbB4 mRNA, and that neuregulin stimulates tyrosine phosphorylation of erbB2 and erbB3, indicating that neuregulin signalling in skeletal muscle may be mediated by a complex of erbB2 and erbB3.