Dual epidermal growth factor receptor (EGFR) and HER2 targeting with the tyrosine kinase inhibitor lapatinib is approved for treating advanced HER2-positive breast cancer and can prevent estrogen receptor (ER)-negative mammary tumors in HER2 transgenic mouse models. Ki-67 labeling index (LI) has prognostic and predictive value and can be used to screen drugs' therapeutic and preventive potential in a clinical model of short-term presurgical therapy of breast cancer. We conducted a randomized, placebo-controlled trial of lapatinib (1500 mg/d) administered orally for three weeks between biopsy and surgery in 60 women with HER-2–positive breast cancer to assess lapatinib biomarker (including the primary endpoint, Ki-67 LI) and clinical activity in invasive breast cancer, adjacent ductal intraepithelial neoplasia (DIN, which comprises ductal carcinoma in situ and atypical ductal hyperplasia), and distant ductal hyperplasia without atypia (DH). Ki-67 LI increased progressively in association with disease stage, increasing in the placebo arm, for example, by medians of 3% in DH to 20% in DIN to 30% in invasive cancer. Ki-67 LI in cancer tissue decreased by a mean (±SD) of 9.3% (±34.2) in the lapatinib arm and increased by 15.1% (±30.9) in the placebo arm (P = 0.008). Compared with placebo, lapatinib reduced Ki-67 significantly more in ER-negative tumors (by 34.8%; P = 0.01) but not significantly more in ER-positive tumors (by 12.3%; P = 0.2) and reduced Ki-67 more (nonsignificantly) in cytosol PTEN-overexpressing tumors (P = 0.057). The prevalence of DIN in post-treatment surgical specimens of both arms was similar (70%–76%), with a median Ki-67 of 15% (range, 5%–35%) on lapatinib versus 20% (5%–60%) on placebo (P = 0.067). The prevalence of DH also was similar in both arms (>90%), with a median Ki-67 of 1% (1%–7%) on lapatinib versus 3% (1%–5%) on placebo (P = 0.006). Other results of lapatinib versus placebo, respectively, were as follows: Median tumor diameter at surgery of 18 mm (11 mm–57 mm) versus 24 mm (10 mm–37 mm; P = 0.009); partial response of 13.6% versus 3.7%, stable disease of 59.1% versus 40.7%, and progression of 27.3% versus 55.6% (P-trend = 0.035). In conclusion, short-term lapatinib decreased cell proliferation in DIN, DH, and invasive HER-2–positive (especially ER-negative) breast cancer, thus providing the rationale for further clinical development of lapatinib for breast cancer prevention in high-risk patients, including those with HER-2–positive DIN. Cancer Prev Res; 4(8); 1181–9. ©2011 AACR.