HER-2 is overexpressed in 20-25% of invasive breast cancers and is associated with an aggressive tumor phenotype and reduced survival rate. The HER-2 status of a tumor is the critical determinant of response to the HER-2-targeted antibody Herceptin. Thus, accurate assessment of HER-2 expression levels is essential for identifying breast cancer patients who will benefit from HER-2-targeted therapy. Herceptin combined with chemotherapy increases response rates, time to disease progression, and survival. However, the majority of cancers that initially respond to Herceptin begin to progress again within 1 year. This review describes mechanisms by which Herceptin inhibits cell growth in breast cancers that overexpress HER-2 and highlights possible mechanisms contributing to Herceptin resistance.