We have developed a breast cancer intratumoral aromatase model to simulate the postmenopausal breast cancer patient in order to compare the antitumor efficacy of aromatase inhibitors (AIs) and antiestrogens (AEs). The AI letrozole sustained growth inhibition longer than the AE tamoxifen. Nevertheless, eventually tumors began to grow despite continued treatment. Estrogen receptor‐α (ER‐α) levels decreased below control levels concomitant with increased phosphorylation of ER‐α and unaltered progesterone receptor (PgR) levels. Expression of Her‐2, p‐Shc, Grb‐2, p‐Raf, p‐Mekl/2, and p‐MAPK was increased in the letrozole‐resistant tumors. When cells isolated from letrozole‐resistant tumors (LTLTCa cells) were treated with inhibitors of the Her‐2 signaling pathway, such as trastuzumab (herceptin), ER‐α was restored. Furthermore, sensitivity of LTLTCa cells to AIs and AEs was regained. These findings suggest cross‐talk between ER and Her‐2 signaling. To prevent activation of the Her‐2 pathway and resistance to AIs, mice were treated with a combination of an AI anastrozole and the ER downregulator fulvestrant. This resulted in no increase in Her‐2 and p‐MAPK levels, and tumor growth was significantly inhibited. Thus, blocking both ER and Her‐2 signaling delayed development of resistance to AIs. This hypothesis was supported by the finding that growth of letrozole‐resistant tumors was reduced when xenografts were treated with trastuzumab combined with letrozole. In addition, resistance to letrozole could be reversed by discontinuing letrozole. Our findings indicate that after letrozole treatment is stopped, the antitumor effect of letrozole can be restored when the AI treatment is resumed.