Amplification and overexpression of erbB2/neu proto-oncogene is observed in 20-30% human breast cancer and is inversely correlated with the survival of the patient. Despite this, somatic activating mutations within erbB2 in human breast cancers are rare. However, we have previously reported that a splice isoform of erbB2, containing an in-frame deletion of exon 16 (herein referred to as ErbB2ΔEx16), results in oncogenic activation of erbB2 because of constitutive dimerization of the ErbB2 receptor. Here, we demonstrate that the ErbB2ΔEx16 is a major oncogenic driver in breast cancer that constitutively signals from the cell surface. We further show that inducible expression of the ErbB2ΔEx16 variant in mammary gland of transgenic mice results in the rapid development of metastatic multifocal mammary tumors. Genetic and biochemical characterization of the ErbB2ΔEx16-derived mammary tumors exhibit several unique features that distinguish this model from the conventional ErbB2 ones expressing the erbB2 proto-oncogene in mammary epithelium. Unlike the wild-type ErbB2-derived tumors that express luminal keratins, ErbB2ΔEx16-derived tumors exhibit high degree of intratumoral heterogeneity co-expressing both basal and luminal keratins. Consistent with these distinct pathological features, the ErbB2ΔEx16 tumors exhibit distinct signaling and gene expression profiles that correlate with activation of number of key transcription factors implicated in breast cancer metastasis and cancer stem cell renewal.