Overexpression of the oncogene amplified in breast cancer 1 (AIB1)/steroid receptor coactivator-3 (SRC-3) induces mammary tumorigenesis in mice. In breast cancer, high levels of AIB1/SRC-3 and the growth factor receptor HER2/neu predict resistance to endocrine therapy and poor outcome. However, a mechanistic relationship between AIB1/SRC-3 and HER2/neu in the development of breast cancer has not been shown. Here, we show that deletion of one allele of SRC-3 significantly delays Neu-induced mammary tumor development in mice. Homozygous deletion of SRC-3 in mice completely prevents Neu-induced tumor formation. By ages 3 to 4 months, Neu/SRC-3(+/-) mice exhibit a noticeable reduction in lateral side-bud formation, accompanied by reduced cellular levels of phosphorylated Neu compared with Neu/SRC-3(wt) mice. In Neu-induced tumors, high levels of SRC-3, phosphorylated Neu, cyclin D1, cyclin E, and proliferating cell nuclear antigen expression are observed, accompanied by activation of the AKT and c-Jun NH(2) kinase (JNK) signaling pathways. In comparison, phosphorylated Neu, cyclin D1, and cyclin E are significantly decreased in Neu/SRC-3(+/-) tumors, proliferation is reduced, and AKT and JNK activation is barely detectable. Our data indicate that AIB1/SRC-3 is required for HER2/neu oncogenic activity and for the phosphorylation and activation of the HER2/neu receptor. We predict that reducing AIB1/SRC-3 levels or activity in the mammary epithelium could potentiate therapies aimed at inhibiting HER2/neu signaling in breast cancer.