Trastuzumab-emtansine (T-DM1) is an antibody-drug conjugate (ADC) that efficiently delivers a highly potent microtubule inhibitor to HER2 overexpressing cells. Herein, we utilize HER2 transformed human mammary epithelial cells (HME2) to demonstrate in vitro and in vivo response and recurrence upon T-DM1 treatment. Continuous in vitro dosing of HME2 cells with T-DM1 failed to produce a spontaneously resistant cell line. However, induction of epithelial-mesenchymal transition (EMT) via pretreatment with TGF-β1 was capable of promoting emergence of T-DM1-resistant (TDM1R) cells. Flow cytometric analyses indicated that induction of EMT decreased trastuzumab binding, prior to overt loss of HER2 expression in TDM1R cells. Kinome analyses of TDM1R cells indicated increased phosphorylation of ErbB1, ErbB4, and FGFR1. TDM1R cells failed to respond to the ErbB kinase inhibitors lapatinib and afatinib, but they acquired sensitivity to FIIN4, a covalent FGFR kinase inhibitor. In vivo, minimal residual disease (MRD) remained detectable via bioluminescent imaging following T-DM1-induced tumor regression. Upon cessation of the ADC, relapse occurred and secondary tumors were resistant to additional rounds of T-DM1. These recurrent tumors could be inhibited by FIIN4. Moreover, ectopic overexpression of FGFR1 was sufficient to enhance tumor growth, diminish trastuzumab binding, and promote recurrence following T-DM1-induced MRD. Finally, patient-derived xenografts from a HER2+ breast cancer patient who had progressed on trastuzumab failed to respond to T-DM1, but tumor growth was significantly inhibited by FIIN4. Overall, our studies strongly support therapeutic combination of TDM1 with FGFR-targeted agents in HER2+ breast cancer.