The HER2-targeted therapy trastuzumab is widely used for the treatment of patients with metastatic breast tumors overexpressing HER2. However, an objective response is observed in only 12% to 24% of patients treated with trastuzumab as a single agent and initial responders regress in <6 months (1-3). The reason for the clinical failure of trastuzumab in this setting remains unclear. Here we show that local lymph node-positive disease progression in 89% of breast cancer patients with HER2-positive tumors involves the HER2 oncogenic variant HER2Δ16. We further show that ectopic expression of HER2Δ16, but not wild-type HER2, promotes receptor dimerization, cell invasion, and trastuzumab resistance of NIH3T3 and MCF-7 tumor cell lines. The potentiated metastatic and oncogenic properties of HER2Δ16 were mediated through direct coupling of HER2Δ16 to Src kinase. Cotargeting of HER2Δ16 and Src kinase with the singleagent tyrosine kinase inhibitor dasatinib resulted in Src inactivation, destabilization of HER2Δ16, and suppressed tumorigenicity. Activated Src kinase was also observed in 44% of HER2Δ16-expressing breast carcinomas underscoring the potential clinical implications of coupled HER2Δ16 and Src signaling. Our results suggest that HER2Δ16 expression is an important genetic event driving trastuzumab-refractory breast cancer. We propose that successful targeted therapeutics for intervention of aggressive HER2-positive breast cancers will require a strategy to suppress HER2Δ16 oncogenic signaling. One possibility involves a therapeutic strategy employing single-agent tyrosine kinase inhibitors to disengage the functionally coupled oncogenic HER2Δ16 and Src tyrosine kinase pathways.