The formation of ErbB2/ErbB3 heterodimers plays a critical role in ErbB2-mediated signaling in both normal mammary development and mammary tumor progression. Through 7 phosphoinositide 3-kinase (PI3K) phosphotyrosine-binding sites, ErbB3 is able to recruit PI3K and initiate the PI3K/AKT signaling pathway. To directly explore the importance of the ErbB3/PI3K pathway in mammary development and tumorigenesis, we generated a mouse model that carries a mutant ErbB3 allele lacking the seven known PI3K-binding sites (ErbB3(Δ85)). Mice homozygous for the ErbB3(Δ85) allele exhibited an initial early growth defect and a dramatic impairment of mammary epithelial outgrowth. Although homozygous adult mice eventually recovered from the growth defect, their mammary glands continued to manifest the mammary outgrowth and lactation defects throughout their adult life. Interestingly, despite the presence of a profound mammary gland defect, all of the female ErbB3Δ85 mice developed metastatic ErbB2-induced mammary tumors secondary to mammary epithelial expression of an activated ErbB2 oncogene capable of compensatory PI3K signaling from both EGF receptor and ErbB2. Our findings therefore indicate that, although ErbB3-associated PI3K activity is critical for mammary development, it is dispensable for ErbB2-induced mammary tumor progression