Treatment with tyrosine kinase inhibitors (TKIs) including trastuzumab has revolutionized the management of HER2-positive breast cancer. Recent evaluation of clinical trial data suggests that a subset of HER2/ER double-positive cancers may not receive significant benefit from the TKI therapy. Here we investigate the cross talk between HER2 and ER in breast cancer and monitor the effect of trastuzumab on the tyrosine kinase effector transcription factor Myc. In HER2-positive breast cancer patients treated with neoadjuvant trastuzumab, steroid receptor-negative status (ER and PR negative) of pre-treatment biopsies predicted pathological complete response (pCR) (n=31 patients, P=0.0486), whereas elevated Myc protein inversely associated with pCR (P=0.0446). Liquid chromatography mass spectrometry identified the corepressor SMRT as a novel Myc-interacting protein. Trastuzumab treatment enhanced Myc-SMRT interactions in HER2-overexpressing breast cancer cells (LCC1) and inhibited expression of the Myc target gene survivin. In HER2-low, ER-positive steroid-dominant cells (MCF7), trastuzumab therapy repressed Myc-SMRT interactions and upregulated survivin expression. Trastuzumab treatment induced ER-CBP interactions, enhanced ER transcriptional activity and upregulated expression of the ER target gene pS2. The absence of pS2 expression in pre-treatment biopsies predicted pCR to neoadjuvant trastuzumab in breast cancer patients (n=25, P=0.0089) and pS2 expression associated with residual cancer burden (P=0.0196). Furthermore, metastatic tissues from patients who had failed trastuzumab therapy were pS2 positive. In HER2-overexpressing cells, trastuzumab treatment can repress Myc transcriptional activity and clinical response is favorable. However, with co-expression of the steroid pathway, this inhibition is lost and response to treatment is often poor.