530 Background: Activation of the mTOR pathway is a key adaptive change driving endocrine resistance. RAD001, an oral mTOR inhibitor, and letrozole synergistically inhibit proliferation in breast cancer cells. Methods: 270 postmenopausal women with > T2 ER+ tumors were randomized to receive 4 mo of letrozole 2.5mg QD + RAD001 10mg QD or letrozole 2.5mg plus placebo. The primary endpoint was overall clinical response. Mandatory needle biopsies were collected immediately prior to initial treatment, and at day 15 after treatment initiation. Samples were assessed at baseline for Her2 by FISH and mutation of exons 9 and 20 of PIK3CA and exons 5–8 of TP53, and at baseline and day 15 for Ki67, phospho-Akt S473, phospho-S6, PTEN, CyclinD1, ER, PR, p53, and total Akt and S6 by immunohistochemistry. A total of 207 patients (77%) were primary marker evaluable and clinical outcome evaluable; 186 patients had an evaluable second biopsy. Results: The clinical response rate with RAD001 + letrozole was significantly superior to letrozole alone at the preplanned Alpha of 0.1 (68 vs 59%, p=0.062). This was confirmed by ultrasound (OR 58% vs 47 %, p=0.035). Pharmacodynamic changes in each treatment arm were observed. Marked downregulation in progesterone receptor and cyclin D1 were seen in response to letrozole. Phospho- S6 levels showed dramatic down-regulation only in response to RAD001. Cell cycle response, as defined by either % reduction in Ki67 at day 15 or by proportion of patients with Ki67≤2 at day 15, was also significantly higher in the RAD001 + letrozole arm (57% vs 30% for Ki67≤2 at day 15, p<0.01). The rate of grade 3/4 adverse events (Aes) was 22.6% in the RAD001 + letrozole arm vs 3.8% in the placebo + letrozole arm. Most frequent grade 3/4 Aes with RAD001 + letrozole were hyperglycemia (n=7), stomatitis (3), interstitial lung disease/pneumonitis (3) and infections (3). Conclusions: RAD001 significantly increases the efficacy of letrozole in newly diagnosed ER+ breast cancer, with regard to both clinical and cell cycle response. The increased cell cycle response rate in the RAD001 arm was found in all subsets of tumors, including PTEN-positive, PIK3CA wild-type tumors. Author Disclosure Employment or Leadership Consultant or Advisory Role Stock Ownership Honoraria Research Expert Testimony Other Remuneration Novartis Novartis Novartis Novartis Novartis