ErbB2 is a vital breast cancer gene and its overexpression has a decisive role in breast tumor initiation and malignant progression. However, the molecular mechanisms that underlie ErbB2 dysregulation in breast cancer cells remain incompletely understood. In this study, we found that ErbB2 expression is inversely correlated with the level of miR-155, a well-documented oncogenic miRNA, in ErbB2-positive breast tumors. We further determined that miR-155 potently suppresses ErbB2 in breast cancer cells. Mechanistically, miR-155 acts to downregulate ErbB2 via two distinct mechanisms. First, miR-155 represses ErbB2 transcription by targeting HDAC2, a transcriptional activator of ErbB2. Second, miR-155 directly targets ErbB2 via a regulatory element in its coding region. Intriguingly, miR-155 is upregulated by trastuzumab and in turn leads to a reduction of ErbB2 expression in trastuzumab-treated ErbB2-positive breast cancer cells. Functional studies showed that miR-155 inhibits ErbB2-induced malignant transformation of human breast epithelial cells. Thus, our findings reveal an intriguing miR-155-ErbB2 context in regulating the malignant transformation of breast epithelial cells, and thereby indicate a novel mode of action for miR-155 in ErbB2-positive breast cancer.