The HER2-targeted antibody–drug conjugate trastuzumab emtansine (T-DM1) is approved for the treatment of metastatic, HER2-positive breast cancer after prior trastuzumab and taxane therapy, and has also demonstrated efficacy in the adjuvant setting in incomplete responders to neoadjuvant therapy. Despite its objective activity, intrinsic and acquired resistance to T-DM1 remains a major clinical challenge. T-DM1 mediates its activity in a number of ways, encompassing HER2 signalling blockade, Fc-mediated immune response and payload-mediated microtubule poisoning. Resistance mechanisms relating to each of these features have been demonstrated, and we outline the findings of these studies in this review. In our overview of the substantial literature on T-DM1 activity and resistance, we conclude that the T-DM1 resistance mechanisms most strongly supported by the experimental data relate to dysfunctional intracellular metabolism of the construct and subversion of DM1-mediated cell killing. Loss of dependence on signalling initiated by HER2–HER2 homodimers is not substantiated as a resistance mechanism by clinical or experimental studies, and the impact of EGFR expression and tumour immunological status requires further investigation. These findings are instructive with respect to strategies that might overcome T-DM1 resistance, including the use of second-generation anti-HER2 antibody–drug conjugates that deploy alternative linker-payload chemistries.