Lapatinib is a dual (ErbB-1 and ErB-2) receptor tyrosine kinase inhibitor (TKI) that was recently approved by the FDA for the treatment of advanced breast cancer. It shows synergy with trastuzumab, and has demonstrated clinical activity in trastuzumab-resistant tumour. This paper reviews the drug development of lapatinib from preclinical studies to the pivotal Phase III trial and ongoing clinical studies. Areas of interest include the advantages of small molecule TKIs versus antibodies in targeting HER receptors and the efficacy of lapatinib in the treatment of cerebral metastases. The surprisingly high response rate in inflammatory breast cancer raises the possibility of other novel predictive biomarkers. The potential for combination and sequencing with other biological and cytotoxic agents is both exciting and challenging.