Breast cancers overexpressing the ErbB2 (HER2) receptor tyrosine kinase oncogene are treated with targeted therapies such as trastuzumab (Herceptin), an anti-ErbB2 antibody, and lapatinib (GW572016/Tykerb), a selective small molecule inhibitor of ErbB2 and epidermal growth factor receptor tyrosine kinases that was recently approved for ErbB2+ breast cancers that progressed on trastuzumab-based therapy. The efficacy of lapatinib as a monotherapy or in combination with chemotherapy, however, is limited by the development of therapeutic resistance that typically occurs within 12 months of starting therapy. In contrast to small molecule inhibitors targeting other receptor tyrosine kinases where resistance has been attributed to mutations within the targeted receptor, ErbB2 mutations have not been commonly found in breast tumors. Instead, acquired resistance to lapatinib seems to be mediated by redundant survival pathways that are activated as a consequence of marked inhibition of ErbB2 kinase activity. For example, inhibition of phosphatidylinositol3 kinase-Akt in lapatinib-treated cells leads to derepression of FOXO3A, a transcription factor that up-regulates estrogen receptor (ER) signaling, resulting in a switch in the regulation of survival factors (e.g., survivin) and cell survival from ErbB2 alone to ER and ErbB2 in resistant cells. In this review, we discuss the effects of lapatinib on signaling networks in ErbB2+ breast cancer cells to elucidate potential mechanisms of therapeutic resistance and strategies to overcome or prevent its development.