Secondary bile acids such as deoxycholic acid (DCA) are known to promote colorectal cancer (CRC). Increasing evidence suggests that DCA-induced signaling is mediated by activation of the epidermal growth factor receptor (EGFR). We have shown that activation of the EGFR induces up-regulation of cyclooxygenase 2, basolateral release of prostaglandins (PGs), and mitogenesis in a polarizing human colon cancer cell line, HCA-7. The purpose of this study was to determine the mechanism by which DCA activates EGFR in human polarizing CRC cell lines HCA-7 and HCT-8. A primary, non-tumor-promoting bile acid (cholic acid [CA]) and a secondary, tumor-promoting bile acid, DCA, were added to the apical and basolateral compartment of polarized HCA-7 and HCT-8 cells. These cells were pretreated with monoclonal antibody 528, a monoclonal antibody that inhibits ligand binding to EGFR, or with WAY-022, a selective inhibitor of tumor necrosis factor-alpha converting enzyme/a disintegrin and metalloprotease-17 (TACE/ADAM-17), which cleaves amphiregulin (AR) to its mature, soluble form from the basolateral cell membrane. AR levels were measured in the apical and basolateral medium and cell lysates by radioimmunoassay. PGs were measured in the apical and basolateral medium by gas chromatography/mass spectrometry. Basolateral delivery of DCA, but not CA, preferentially stimulated release of AR into the basolateral medium compared with cell lysates of polarized HCA-7 and HCT-8 cells. Basolateral delivery of DCA resulted in increased basolateral PGE2 levels (P < .05), and this effect was attenuated by pretreatment with monoclonal antibody 528 (P < .05). Inhibiting cell surface cleavage of AR with WAY-022 before DCA treatment reduced AR (P < .05) and PGE2 (P < .05) levels in the basolateral medium. DCA, but not CA, results in compartment-specific, ligand-dependent activation of EGFR and subsequent increased basolateral PGE2 levels. The mechanism of DCA-induced EGFR activation is ligand-dependent and is controlled, at least in part, at the level of AR release from the basolateral cell membrane.