The molecular mechanisms underlying epidermal growth factor (EGF) receptor tyrosine kinase down-regulation in response to growth factor binding are coming into focus and involve cbl-mediated receptor ubiquitination followed by lysosomal degradation. However, mechanisms underlying the ligand-stimulated degradation of the related receptor tyrosine kinases of the ErbB family do not involve cbl and remain unexplored. Previous studies have demonstrated that the E3 ubiquitin ligase Nrdp1 contributes to the maintenance of steady-state ErbB3 levels by mediating its growth factor-independent degradation. Here we demonstrate that treatment of cells with the ErbB3 ligand neuregulin-1 (NRG1) stabilizes the deubiquitinating enzyme USP8, which in turn stabilizes Nrdp1. The catalytic activity of USP8 is required for NRG1-induced Nrdp1 stabilization. We provide evidence that Akt-mediated phosphorylation of USP8 threonine residue T907 contributes to USP8 stability. Finally, we demonstrate that Nrdp1 or USP8 knockdown suppresses NRG1-induced ErbB3 ubiquitination and degradation in MCF7 breast cancer cells. We conclude that an NRG1-induced protein stability cascade involving USP8 and Nrdp1 mediates the down-regulation of ErbB3. Our observations raise the possibility that the ligand-induced augmentation of pathways involved in the maintenance of basal levels of receptor tyrosine kinases can contribute to ligand-stimulated down-regulation.