We have examined whether inhibition of phosphatidylinositol-3 kinase (PI3K) and its target, the serine/threonine kinase Akt, play a role in the antitumor effect of the HER2 antibody Herceptin. Herceptin inhibited colony formation, down-regulated cyclin D1, and increased p27 protein levels in the HER2 gene-amplified BT-474 and SKBR-3 human breast cancer cells. These effects were temporally associated with the inhibition of PI3K activity in vitro as well as Akt function as measured by steady-state levels of phospho-Ser473 Akt and kinase activity against glycogen synthase kinase (GSK)-3beta. These responses were not observed in MDA-361 and MDA-453 cells, which do not exhibit HER2 gene amplification and are relatively resistant to Herceptin. Treatment of BT-474 cells with Herceptin inhibited the constitutive tyrosine phosphorylation of HER3 and disrupted the basal association of HER3 with HER2 and of HER3 with p85alpha potentially explaining the inhibition of PI3K. Treatment with either Herceptin or the PI3K inhibitor LY294002 increased the levels of p27 in the nucleus>cytosol, thus increasing the ratio of p27:Cdk2 in the nucleus and inhibiting Cdk2 activity and cell proliferation. Antisense p27 oligonucleotides abrogated the increase in p27 induced by Herceptin and prevented the antibody-mediated reduction in S phase. Transduction of BT-474 cells with an adenovirus-encoding active (myristoylated) Akt (Myr-Akt), but not with a beta-galactosidase control adenovirus, prevented the Herceptin- or LY294002-induced down-regulation of cyclin D1 and of phosphorylated GSK-3beta and prevented the accumulation of p27 in the nucleus and cytosol. In addition, Myr-Akt prevented Herceptin-induced inhibition of the cell proliferation of BT-474 cells and Herceptin-induced apoptosis of SKBR-3 cells. These data suggest that (a) changes in cell cycle- and apoptosis-regulatory molecules after HER2 blockade with Herceptin result, at least in part, from the inhibition of Akt; and (b) disabling PI3K and Akt is required for the antitumor effect of HER2 inhibitors.