Heparin-binding epidermal growth factor-like growth factor (HB-EGF) is a member of the EGF growth factor family. Initially synthesized as a membrane-bound precursor (pro-HB-EGF), it is cleaved at the juxtamembrane domain to release the soluble form of HB-EGF (s-HB-EGF) by sheddases, including matrix metalloproteinases (MMP) and a disintegrin and metalloproteinases. This is a process referred to as ectodomain shedding and is implicated in the process of all ligands of the EGF receptor (EGFR) family. The tumorigenic potential of s-HB-EGF has been studied extensively; however, the role of pro-HB-EGF in tumor progression is unknown, despite the fact that a considerable amount of pro-HB-EGF remains on the cell membrane. Our data here clearly indicated the distinct role of pro-HB-EGF in the regulation of E-cadherin expression and the epithelial-mesenchymal transition. We showed here that the expression of pro-HB-EGF was associated with the differentiation status in pancreatic tumors and cell lines. Expression of noncleaved pro-HB-EGF in pancreatic cells resulted in the up-regulation of E-cadherin through suppression of ZEB1, which is a transcriptional repressor of E-cadherin. Inhibition of HB-EGF shedding using a MMP inhibitor, GM6001, also dramatically augmented the E-cadherin expression while suppressing the EGFR activation. Moreover, up-regulation of E-cadherin by pro-HB-EGF not only resulted in cellular morphologic change but also decreased cell motility and enhanced apoptotic sensitivity in response to gemcitabine-erlotinib treatment. Collectively, our data defined a distinct role of pro-HB-EGF in the regulation of E-cadherin, suggesting that inhibition of shedding may be a novel approach to suppress pancreatic metastasis and sensitize cells to cancer therapy.