Trastuzumab has been shown to improve the survival outcomes of HER2 positive breast cancer patients. However, a significant proportion of HER2-positive patients are either inherently resistant or develop resistance to trastuzumab. We assessed the effects of neratinib, an irreversible panHER inhibitor, in a panel of 36 breast cancer cell lines. We further assessed its effects with or without trastuzumab in several sensitive and resistant breast cancer cells as well as a BT474 xenograft model. We confirmed that neratinib was significantly more active in HER2-amplified than HER2 non-amplified cell lines. Neratinib decreased the activation of the 4 HER receptors and inhibited downstream pathways. However, HER3 and Akt were reactivated at 24 hours, which was prevented by the combination of trastuzumab and neratinib. Neratinib also decreased pHER2 and pHER3 in acquired trastuzumab resistant cells. Neratinib in combination with trastuzumab had a greater growth inhibitory effect than either drug alone in 4 HER2 positive cell lines. Furthermore, trastuzumab in combination with neratinib was growth inhibitory in SKBR3 and BT474 cells which had acquired resistance to trastuzumab as well as in a BT474 xenograft model. Innately trastuzumab resistant cell lines showed sensitivity to neratinib, but the combination did not enhance response compared to neratinib alone. Levels of HER2 and phospho-HER2 showed a direct correlation with sensitivity to neratinib. Our data indicate that neratinib is an effective anti-HER2 therapy and counteracted both innate and acquired trastuzumab resistance in HER2 positive breast cancer. Our results suggest that combined treatment with trastuzumab and neratinib is likely to be more effective than either treatment alone for both trastuzumab-sensitive breast cancer as well as HER2-positive tumors with acquired resistance to trastuzumab.