The transmembrane tyrosine kinase HER2 (ErbB2, neu) is a prototypical biomarker for breast cancers and a therapeutic target. Although anti-HER2 therapies are remarkably effective, HER2-positive tumors are heterogeneous and some subtypes do not respond or develop resistance to these therapies. Here we show that H2NTF, a novel N-terminal fragment of HER2, is expressed at variable levels in 60% of the breast cancer samples analyzed. Characterization of H2NTF shows that it is devoid of the tyrosine kinase domain but it readily interacts with full-length HER2 and other HER receptors. As a consequence, H2NTF acts as a dominant-negative, attenuating the signaling triggered by full-length HER receptors. Expression of H2NTF results in resistance to the treatment with low concentrations of trastuzumab in vitro. However, cells expressing H2NTF and non-expressing cells have similar sensitivity to trastuzumab in vivo, indicating that H2NTF/trastuzumab complexes trigger antibody-dependent cell-mediated cytotoxicity.