Lapatinib is an effective anti-HER2 therapy in advanced breast cancer and docetaxel is one of the most active agents in breast cancer. Combining these agents in pre-treated patients with metastatic disease had previously proved challenging, so the primary objective of this study aimed to determine the maximum tolerated dose (MTD) in treatment-naive patients, by identifying acute dose-limiting toxicities (DLT) during cycle 1 in the first part of a phases 1–2 neoadjuvant European Organisation for Research and Treatment of Cancer (EORTC) trial.Patients with large operable or locally-advanced HER2 positive breast cancer were treated with continuous lapatinib, and docetaxel every 21 days for 4 cycles. Dose levels (DLs) were: 1000/75, 1250/75, 1000/85, 1250/85, 1000/100 and 1250/100 (mg/day)/(mg/m2).Twenty-one patients were included. Two DLTs occurred at dose level 5 (1000/100); one grade 4 neutropenia ⩾7 days and one febrile neutropenia. A further 3 patients were therefore treated at the same dose with prophylactic granulocyte-colony stimulating factor (G-CSF), and 3 patients at dose level 6. No further DLTs were observed.Our recommended dose for phase II is lapatinib 1000 mg/day and docetaxel 100 mg/m2 with G-CSF in HER2 positive non-metastatic breast cancer. The dose of lapatinib should have been 1250 mg/day but we were mindful of the high rate of treatment discontinuation in GeparQuinto with lapatinib 1250 mg/day combined with docetaxel. No grade 3-4 diarrhoea was observed. Pharmacodynamics analysis suggests that concomitant medications altering P-glycoprotein activity (in addition to lapatinib) can modify toxicity, including non-haematological toxicities. This needs verification in larger trials, where it may contribute to understanding the sources of variability in clinical toxicity and treatment discontinuation.