Gefitinib (Iressa) is a specific and effective epidermal growth factor receptor inhibitor. An understanding of the downstream cellular targets of gefitinib will allow the discovery of biomarkers for predicting outcomes and monitoring anti-epidermal growth factor receptor therapies and provide information for overcoming gefitinib resistance. In this study, we investigated the role and regulation of FOXM1 in response to gefitinib treatment in breast cancer. Using the gefitinib-sensitive breast carcinoma cell lines BT474 and SKBR3 as well as the resistant lines MCF-7, MDA-MB-231, and MDA-MB-453, we showed that gefitinib represses the expression of the transcription factor FOXM1 in sensitive, but not resistant, cells. FOXM1 repression by gefitinib is associated with FOXO3a activation and is mediated at the transcriptional level and gene promoter level. These results were verified by immunohistochemical staining of biopsy samples from primary breast cancer patients obtained from a gefitinib neoadjuvant study. We also showed that ectopic expression of an active FOXO3a represses FOXM1 expression, whereas knockdown of FOXO3a expression using small interfering RNA can up-regulate FOXM1 and its downstream targets polo-like kinase, cyclin B1, and CDC25B and rescue sensitive BT474 cells from gefitinib-induced cell proliferative arrest. These results suggest that gefitinib represses FOXM1 expression via FOXO3a in breast cancer. We further showed that overexpression of a wild-type FOXM1 or a constitutively active FOXM1, DeltaN-FOXM1, abrogates the cell death induced by gefitinib, indicating that FOXM1 has a functional role in mediating the gefitinib-induced proliferative arrest and in determining sensitivity to gefitinib. In summary, our study defined FOXM1 as a cellular target and marker of gefitinib activity in breast cancer.