Efficacy data from the KATHERINE clinical trial, comparing the HER2-directed antibody-drug conjugate (ADC) ado-trastuzumab emtansine (T-DM1) to trastuzumab in patients with early-stage HER2-amplified/overexpressing breast cancer with residual disease after neoadjuvant therapy, demonstrates superiority of T-DM1 (HR for invasive disease or death, 0.50; P < 0.001). This establishes foundational precedent for ADCs as effective therapy for treatment of subclinical micrometastasis in an adjuvant (or post-neoadjuvant) early-stage solid tumor setting. Despite this achievement, general principles from proposed systems pharmacokinetic modeling for intracellular processing of ADCs indicate potential shortcomings of T-DM1: (i) C max limited by toxicities; (ii) slow internalization rate; (iii) resistance mechanisms due to defects in intracellular trafficking [loss of lysosomal transporter solute carrier family 46 member 3, (SLC46A3)], and increased expression of drug transporters MDR1 and MRP1; and (iv) lack of payload bystander effects limiting utility in tumors with heterogeneous HER2 expression. These handicaps may explain the inferiority of T-DM1-based therapy in the neoadjuvant and first-line metastatic HER2+ breast cancer settings, and lack of superiority to chemotherapy in HER2+ advanced gastric cancer. In this review, we discuss how each of these limitations is being addressed by manipulating internalization and trafficking using HER2:HER2 bispecific or biparatopic antibody backbones, using site-specific, fixed DAR conjugation chemistry, and payload swapping to exploit alternative intracellular targets and to promote bystander effects. Newer HER2-directed ADCs have impressive clinical activity even against tumors with lower levels of HER2 receptor expression. Finally, we highlight ongoing clinical efforts to combine HER2 ADCs with other treatment modalities, including chemotherapy, molecularly targeted therapies, and immunotherapy.