The Neuregulins and their receptors, the ErbB/HER subfamily of receptor tyrosine kinases, have critical roles in animal physiology, and their deregulation is frequent in cancer. Here we report the identification of the guanine nucleotide exchange factor, phosphatidylinositol 3,4,5-triphosphate-dependent Rac exchanger 1 (P-Rex1), as a novel mediator in signalling by ErbB/HER receptors. P-Rex1 was formerly described as a phosphoinositide 3-kinase and Gβγ activated protein that regulates Rac function. We define how ErbB/HER receptors regulate P-Rex1 function, which involves dephosphorylation of inhibitory residues, and phosphorylation of activating residues of P-Rex. The net balance resulting from activation of this phosphorylation/dephosphorylation cycle of P-Rex1 favours Rac activation. Molecular and biological studies indicated that P-Rex1 phosphorylation regulated the proliferation of breast cancer cells, and P-Rex1 knockdown affected their migration or invasiveness, as well as their in vivo tumourigenic potential. Moreover, as we found correlation between high P-Rex1 expression and poor patient outcome in breast cancer, P-Rex1 targeting may be therapeutically relevant in cancer.