Trastuzumab is a monoclonal antibody targeted against the HER2 tyrosine kinase receptor. The majority of patients with metastatic breast cancer who initially respond to trastuzumab develop resistance within one year of treatment initiation, and in the adjuvant setting 15% of patients still relapse despite trastuzumab-based therapy. In this review, we discuss potential mechanisms of antitumor activity by trastuzumab, and how these mechanisms become altered to promote therapeutic resistance. We also discuss novel therapies that may improve the efficacy of trastuzumab, and that offer hope that the survival of breast cancer patients with HER2-overexpressing tumors can be vastly improved.