Overexpression of the growth factor receptors EGFR and erbB2 occurs frequently in several human cancers and is associated with aggressive tumour behaviour and poor patient prognosis. We have investigated the effects of ZD1839 (Iressa), a novel EGFR tyrosine kinase inhibitor, on the growth, in vitro and in vivo, of human cancer cell lines expressing various levels of EGFR and erbB2. Proliferation of EGFR‐overexpressing A431 and MDA‐MB‐231 cells in vitro was potently inhibited (50%–70%) by ZD1839 with half‐maximally effective doses in the low nanomolar range. In parallel, ZD1839 blocked autophosphorylation of EGFR and prevented activation of PLC‐γ1, ERK MAP kinases and PKB/Akt by EGF. It also inhibited proliferation in EGFR⁺ cancer cell lines overexpressing erbB2 (SKBr3, SKOV3, BT474) by between 20% and 80%, effects which correlated with inhibition of EGF‐dependent erbB2 phosphorylation and activation of ERK MAP kinase and PKB/Akt in SKOV3 cells. Oral administration of ZD1839 inhibited the growth of MDA‐MB‐231 and SKOV3 tumours, established as xenografts in athymic mice, by 71% and 32%, respectively. Growth inhibition coincided with reduced proliferation but no change in apoptotic index. Collectively, these results show that ZD1839, at the doses studied, is a potent inhibitor of proliferation not only in cells overexpressing EGFR but also in EGFR⁺ cells that overexpress erbB2. © 2001 Wiley‐Liss, Inc.