HER2/Neu is overexpressed in 25-30% of all human breast cancers as a result of both gene amplification and enhanced transcription. Transcriptional upregulation of HER2/neu leads to a 6-8-fold increased abundance of its mRNA per gene copy and likely results from the elevated activity of transcription factors acting on the HER2/neu promoter. Here we report that transcripts of PEA3, an ETS transcription factor implicated in oncogenesis, were increased in 93% of HER2/Neu-overexpressing human breast tumor samples. Analyses to uncover the molecular basis for elevated PEA3 transcripts in HER2/Neu-positive breast tumors revealed that the HER2/Neu receptor tyrosine kinase initiated an intracellular signaling cascade resulting in increased PEA3 transcriptional activity; transcriptionally-activated PEA3 stimulated HER2/neu and PEA3 gene transcription by binding to sites in the promoters of these genes. PEA3 also activates transcription of genes encoding matrix-degrading proteinases, enzymes required for tumor cell migration and invasion. These findings implicate PEA3 in the initiation and progression of HER2/Neu positive breast cancer, and suggest that PEA3 and signaling proteins affecting its regulation are appropriate therapeutic targets.