Abstract A splice isoform of the HER2 receptor that lacks exon 16 (d16HER2) is expressed in many HER2-positive breast tumors, where it has been linked with resistance to the HER2-targeting antibody trastuzumab, but the impact of d16HER2 on tumor pathobiology and therapeutic response remains uncertain. Here, we provide genetic evidence in transgenic mice that expression of d16HER2 is sufficient to accelerate mammary tumorigenesis and improve the response to trastuzumab. A comparative analysis of effector signaling pathways activated by d16HER2 and wild-type HER2 revealed that d16HER2 was optimally functional through a link to SRC activation (pSRC). Clinically, HER2-positive breast cancers from patients who received trastuzumab exhibited a positive correlation in d16HER2 and pSRC abundance, consistent with the mouse genetic results. Moreover, patients expressing high pSRC or an activated “d16HER2 metagene” were found to derive the greatest benefit from trastuzumab treatment. Overall, our results establish the d16HER2 signaling axis as a signature for decreased risk of relapse after trastuzumab treatment. Cancer Res; 74(21); 6248–59. ©2014 AACR.