Developing novel synergistic and more effective combination treatments is necessary for better management of breast cancer in the clinic. It is established that HER-2 overexpressing breast cancers are sensitive to the HER-1 (epidermal growth factor receptor (EGFR)) inhibitor gefitinib, but that this targeted agent produces only moderate therapeutic effects in vivo. Here, we use a model of ER(+) HER-2 overexpressing MCF-7 breast cancer (MCF-7(HER-2)) to identify, as broadly as possible, the in vivo microenvironmental and molecular therapeutic responses to gefitinib to predict a therapeutically viable target for gefitinib-based combination treatment. Our data show a link between in vivo reductions in tumor hypoxia (3-fold decrease, P = 0.002) and elevated activity of the mTOR pathway (3.8-fold increase in phospho-p70-S6K protein, P = 0.006) in gefitinib treated MCF-7(HER-2) tumors. Despite decreased levels of phosphorylated EGFR, HER-2 and Erk1/2 (P = 0.081, 0.005 and 0.034, respectively) the expression of phospho-AKT was not reduced in MCF-7(HER-2) tumors after gefitinib treatment. Levels of ERalpha receptor were, however, 1.8-fold higher in gefitinib treated compared to control tumors (P = 0.008). Based on these results we predict that gefitinib activity against ER(+) HER-2 overexpressing EGFR co-expressing breast cancers should be enhanced if used with agents that target the mTOR pathway. In vitro studies using MCF-7(HER-2) and BT474 breast cancer cells exposed to gefitinib and rapamycin in combination show that this combination produced significantly greater growth inhibitory effects than either of the drugs alone. Chou and Talalay analysis of the data suggested that combination of gefitinib and rapamycin was synergistic (CI < 1) at a number of selected drug ratios and over a broad range of effective doses.