Amplification and overexpression of ErbB2 strongly correlates with low rates of apoptosis, resistance to chemotherapies and a poor clinical prognosis. A deeper understanding of pathways downstream of ErbB2 signaling that promotes transformation of mammary epithelial cells and confers resistance to chemotherapeutic drugs is likely to identify novel strategies for therapeutic intervention in breast cancer. Using a controlled dimerization system to activate ErbB2 within three-dimensional epithelial acini-like structures derived from MCF 10A cells, I investigated pathways used by ErbB2 to transform normal human breast epithelial cells. I found that while ErbB2 uses multiple pathways to induce cell proliferation and disrupt 3D epithelial organization, it preferentially uses pathways downstream of Tyr 1201 to disrupt apical basal polarity and pathways downstream of Tyr 1226/7 to inhibit cell death in 3D acini and during Taxol treatment. The autophosphorylation site 1226/7 interacts with the scaffolding molecule Shc, and is known to activate the Ras/Erk pathway. However, inhibition of cell death did not correlate with activation Erk or Akt pathways, but was dependent on Shc expression suggesting the presence of Shc dependent pathway that controls ErbB2 induced inhibition of cell death. These results provide a new paradigm for treatment of ErbB2 driven tumors. Pathways responsible for inhibiting apoptosis are more attractive than pathways that target cell proliferation to design therapeutic intervention to treat ErbB2 positive tumors.