HER2 is a 185-kDa transmembrane oncoprotein encoded by the HER2 gene. It is located on chromosome 17q21 and is overexpressed in approximately 15% of invasive breast cancers. In addition, it is a poor prognostic factor for survival and disease progression. Approximately 30% of HER2-positive tumors also express a series of carboxy-terminal HER2 fragments known as p95HER2, in addition to the full-length HER receptor. Previous studies have found that p95HER2 represents an independent prognostic marker in patients with HER2-positive disease. Moreover, p95HER2 status might be a decisive factor when choosing between different therapies because p95HER2 fragment-positive tumors are resistant to trastuzumab but respond to tyrosine kinase inhibitors, such as lapatinib, as do p95HER2-negative tumors. p95HER2 fragments arise through at least two different mechanisms: proteolytic shedding of the full-length p185HER2 receptor extracellular domain and translation of HER2 mRNA from internal initiation codons. The present review is based primarily on recent studies suggesting p95HER2 constitutes a new surrogate marker for an aggressive HER2-positive breast cancer subtype with distinct clinical and biological features.