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 HER2Delta16. We further show that ectopic expression of HER2Delta16, 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 HER2Delta16 were mediated through direct coupling of HER2Delta16 to Src kinase. Cotargeting of HER2Delta16 and Src kinase with the single-agent tyrosine kinase inhibitor dasatinib resulted in Src inactivation, destabilization of HER2Delta16, and suppressed tumorigenicity. Activated Src kinase was also observed in 44% of HER2Delta16-expressing breast carcinomas underscoring the potential clinical implications of coupled HER2Delta16 and Src signaling. Our results suggest that HER2Delta16 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 HER2Delta16 oncogenic signaling. One possibility involves a therapeutic strategy employing single-agent tyrosine kinase inhibitors to disengage the functionally coupled oncogenic HER2Delta16 and Src tyrosine kinase pathways.