p40, a Lactobacillus rhamnosus GG (LGG)-derived soluble protein, ameliorates intestinal injury and colitis, reduces apoptosis, and preserves barrier function by transactivation of the EGF receptor (EGFR) in intestinal epithelial cells. The aim of this study is to determine the mechanisms by which p40 transactivates the EGFR in intestinal epithelial cells. Here we show that p40-conditioned medium activates EGFR in young adult mouse colon epithelial cells and human colonic epithelial cell line, T84 cells. p40 up-regulates a disintegrin and metalloproteinase domain-containing protein 17 (ADAM17) catalytic activity, and broad spectrum metalloproteinase inhibitors block EGFR transactivation by p40 in these two cell lines. In ADAM17-deficient mouse colonic epithelial (ADAM17(-/-) MCE) cells, p40 transactivation of EGFR is blocked, but can be rescued by re-expression with WT ADAM17. Furthermore, p40 stimulates release of heparin binding (HB)-EGF, but not transforming growth factor (TGF)α or amphiregulin, in young adult mouse colon cells and ADAM17(-/-) MCE cells overexpressing WT ADAM17. Knockdown of HB-EGF expression by siRNA suppresses p40 effects on transactivating EGFR and Akt, preventing apoptosis, and preserving tight junction function. The effects of p40 on HB-EGF release and ADAM17 activation in vivo are examined after administration of p40-containing pectin/zein hydrogel beads to mice. p40 stimulates ADAM17 activity and EGFR activation in colonic epithelial cells and increases HB-EGF levels in blood from WT mice, but not from mice with intestinal epithelial cell-specific ADAM17 deletion. Thus, these data define a mechanism of a probiotic-derived soluble protein in modulating intestinal epithelial cell homeostasis through ADAM17-mediated HB-EGF release, leading to transactivation of EGFR.