Lapatinib, a dual tyrosine kinase inhibitor of ErbB1 and ErbB2, shows a clinical benefit in a subset of patients with advanced urothelial bladder cancer (UBC). We hypothesized that the corresponding gene, ERBB2, is affected by mutations in a subset of UBC and that these mutations impact ErbB2 function, signaling, UBC proliferation, gene expression, and predict response to lapatinib. We found ERBB2 mutations in 5 of 33 UBC cell lines (15%), all of which were derived from invasive or high grade tumors. Phosphorylation and activation of ErbB2 and its downstream pathways were markedly enhanced in mutated cell lines compared with the ERBB2 wild-type. In addition, the gene expression profile was distinct, specifically for genes encoding for proteins of the extracellular matrix. RT112 cells infected with ERBB2 mutants showed a particular growth pattern ("mini-foci"). Upon treatment with lapatinib, 93% of these "mini-foci" were reversed. The sensitivity to lapatinib was greatest among cell lines with ERBB2 mutations. In conclusion, ERBB2 mutations occur in a subset of UBC and impact proliferation, signaling, gene expression and predict a greater response to lapatinib. If confirmed in the clinical setting, this may lead the way toward personalized treatment of a subset of UBC.