Molecular alterations in breast cancer are being incorporated into the development of new treatment strategies. The HER-2/neu oncogene has been extensively investigated as a prognostic factor and recently as a predictor of response to chemotherapy or endocrine therapy. The development of a humanized anti-HER-2 monoclonal antibody (Herceptin) and the encouraging results obtained in the treatment of patients with HER-2 overexpressing metastatic breast cancer with this antibody have resulted in renewed interest in HER-2/neu. This article reviews the current knowledge of HER-2/neu both as a prognostic and a predictive factor. Problems associated with the standardization of the methodology for assessing HER-2/neu status and clinically significant cut-off points are addressed.