Neuregulin (also known as NDF, heregulin, ARIA, GGF or SMDF), induces cell growth and differentiation. Biological effects of neuregulin are mediated by members of the erbB family of tyrosine kinase receptors. Three major neuregulin isoforms are produced from the gene, which differ substantially in sequence and in overall structure. Here we use in situ hybridization with isoform-specific probes to illustrate the spatially distinct patterns of expression of the isoforms during mouse development. Ablation of the neuregulin gene in the mouse has demonstrated multiple and independent functions of this factor in development of both the nervous system and the heart. We show here that targeted mutations that affect different isoforms result in distinct phenotypes, demonstrating that isoforms can take over specific functions in vivo. Type I neuregulin is required for generation of neural crest-derived neurons in cranial ganglia and for trabeculation of the heart ventricle, whereas type III neuregulin plays an important role in the early development of Schwann cells. The complexity of neuregulin functions in development is therefore due to independent roles played by distinct isoforms.