An emerging paradigm holds that loss of negative signalling to receptor tyrosine kinases (RTKs) is permissive for their oncogenic activity. Herein, we have addressed tumor suppression by RALT/MIG-6, a transcriptionally controlled feedback inhibitor of ErbB RTKs, in breast cancer cells. Knockdown of RALT expression by RNAi enhanced the EGF-dependent proliferation of normal breast epithelial cells, indicating that loss of RALT signalling in breast epithelium may represent an advantageous condition during ErbB-driven tumorigenesis. Although mutational inactivation of the RALT gene was not detected in human breast carcinomas, RALT mRNA and protein expression was strongly and selectively reduced in ERBB2-amplified breast cancer cell lines. Reconstitution of RALT expression in ERBB2-amplified SKBr-3 and BT474 cells inhibited ErbB-2-dependent mitogenic signalling and counteracted the ability of ErbB ligands to promote resistance to the ErbB-2-targeting drug Herceptin. Thus, loss of RALT expression cooperates with ERBB2 gene amplification to drive full oncogenic signalling by the ErbB-2 receptor. Moreover, loss of RALT signalling may adversely affect tumor responses to ErbB-2-targeting agents.