Activation of insulin-like growth factor-I receptor (IGF-IR) signaling is an important mechanism for trastuzumab resistance. IGF-binding proteins (IGFBP) modulate IGF-IR signaling and play important roles in the control of breast cancer progression. In this article, we report that trastuzumab treatment enhances the expression and secretion of IGFBP-3 in SKBR3 cells, a trastuzumab-sensitive breast cancer cell line, and that this upregulation of IGFBP-3 induced by trastuzumab correlates with trastuzumab-mediated growth inhibition. We describe a new role for IGFBP-3 in the regulation of IGF-I-mediated cross-talk between IGF-IR and ErbB2 signaling pathways. In particular, treatment of SKBR3 cells with recombinant IGFBP-3 blocks IGF-I-induced activation of IGF-IR and ErbB2, and stable expression of IGFBP-3 inhibits SKBR3 cell growth. We find an inverse relationship in the levels of secreted IGFBP-3 such that high levels of IGFBP-3 are associated with trastuzumab-sensitive breast cancer cells (SKBR3 and BT-474), whereas low levels of IGFBP-3 are found in trastuzumab-resistant cells (clone 3 and JIMT-1). In contrast to IGFBP-3, the secretion and expression of IGFBP-2 are upregulated in trastuzumab-resistant SKBR3 cells. Furthermore, we show that IGFBP-2 stimulates activation of ErbB2 and that trastuzumab reduces IGFBP-2-stimulated ErbB2 activation. Based on our data, we propose a novel mechanism of action whereby trastuzumab enhances the expression and secretion of IGFBP-3, which interferes with IGF-I-mediated mitogenic signaling via autocrine and paracrine mechanisms and reduces IGFBP-2-induced ErbB2 activation to mediate growth inhibition. Changes in secretion profiles of IGFBP-2 and IGFBP-3 in trastuzumab-sensitive and trastuzumab-resistant cells may promote the development of IGFBP-2 and IGFBP-3 as predictive biomarkers for trastuzumab resistance.