HER2 amplification is seen in up to 20% of breast cancers and is associated with an aggressive phenotype. Trastuzumab, a monoclonal antibody to HER2, accrues significant clinical benefit in the metastatic and adjuvant settings. However, some patients suffer disease recurrence despite adjuvant trastuzumab therapy, and many patients with metastatic disease do not respond to therapy or develop refractory disease within 1 year of treatment. Given the increased recognition of de novo and acquired resistance to therapy, considerable research has been dedicated to understanding the molecular mechanisms of trastuzumab resistance. Here, we highlight putative models of resistance, including activation of the downstream PI3K-signaling pathway, accumulation of a constitutively active form of HER2, and crosstalk of HER2 with other growth factor receptors. The identification of these specific mechanisms of trastuzumab resistance has provided a rationale for the development of several novel HER2-targeted agents as the mechanisms have largely suggested a continued tumor dependence on HER2 signaling. We explore the emerging data for the treatment of trastuzumab-refractory disease with novel agents including lapatinib, neratinib, pertuzumab, trastuzumab-DM1, HSP90 and PI3K pathway inhibitors, and the future potential for these inhibitors which, if combined with reliable biomarkers of resistance, may ultimately usher in a new era of personalized medicine for this disease.