In non-cancerous cells, phosphorylated proteins exist transiently, becoming de-phosphorylated by specific phosphatases that terminate propagation of signaling pathways. In cancers, compromised phosphatase activity and/or expression occur and contribute to tumor phenotype. The non-receptor phosphatase, PTPN13, has recently been dubbed a putative tumor suppressor. It decreased expression in breast cancer correlates with decreased overall survival. Here we show that PTPN13 regulates a new signaling complex in breast cancer consisting of ErbB2, Src, and EphrinB1. To our knowledge, this signaling complex has not been previously described. Co-immunoprecipitation and localization studies demonstrate that EphrinB1, a PTPN13 substrate, interacts with ErbB2. In addition, the oncogenic V660E ErbB2 mutation enhances this interaction, while Src kinase mediates EphrinB1 phosphorylation and subsequent MAP Kinase signaling. Decreased PTPN13 function further enhances signaling. The association of oncogene kinases (ErbB2, Src), a signaling transmembrane ligand (EphrinB1) and a phosphatase tumor suppressor (PTPN13) suggest that EphrinB1 may be a relevant therapeutic target in breast cancers harboring ErbB2-activating mutations and decreased PTPN13 expression. © 2012 Vermeer et al.