Estrogen receptor (ER)-positive acquired tamoxifen-resistant (TAM-R) MCF-7 breast cancer cell lines exhibit epidermal growth factor receptor (EGFR) expression/signaling and are growth-inhibited by gefitinib (IRESSA). We examined the effect of gefitinib on ER-positive TAM-R and ER-negative hormone-insensitive breast cancer in a Phase II study. Fifty-four patients with breast cancer [ER-positive/acquired TAM-R (n = 28); ER-negative (n = 26)] received oral gefitinib 500 mg/day. Tumor biopsies were taken pre- (n = 28) and 8 weeks post-treatment (n = 14 matched samples). Gefitinib was well tolerated and the clinical benefit rate (objective response or stable disease >24 weeks) was 33.3% overall (n = 18/54), and 53.6 and 11.5% in ER-positive/TAM-R and ER-negative patients, respectively. Pretreatment ER and progesterone receptor-positivity were associated with response (p < 0.001 and 0.016, respectively) and longer progression-free survival (PFS; p= 0.001 and 0.013, respectively). All patients expressed EGFR, but high pretreatment levels predicted poorer outcome (p = 0.005) and shorter PFS (p = 0.012) with gefitinib. In patients with clinical benefit, reduced Ki67 staining during treatment (p = 0.024) was commonly observed, and those with >10% decline in EGFR phosphorylation demonstrated parallel decreases in ERK1/2 MAPK phosphorylation. Acquired tamoxifen resistance appears in part mediated through EGFR signaling and can be blocked with gefitinib.