HER2/Neu gene mutations have been identified in lung cancer. Expression of a HER2 mutant containing a G776^YVMA insertion in exon 20 was more potent than wild-type HER2 in associating with and activating signal transducers, phosphorylating EGFR, and inducing survival, invasiveness, and tumorigenicity. HER2^YVMA transphosphorylated kinase-dead EGFR^K721R and EGFR^WT in the presence of EGFR tyrosine kinase inhibitors (TKIs). Knockdown of mutant HER2 in H1781 lung cancer cells increased apoptosis and restored sensitivity to EGFR TKIs. The HER2 inhibitors lapatinib, trastuzumab, and CI-1033 inhibited growth of H1781 cells and cells expressing exogenous HER2^YVMA. These data suggest that (1) HER2^YVMA activates cellular substrates more potently than HER2^WT; and (2) cancer cells expressing this mutation remain sensitive to HER2-targeted therapies but insensitive to EGFR TKIs.