The docking protein Gab2 is a proto-oncogene product that is overexpressed in primary breast cancers. To determine the functional consequences of Gab2 overexpression, we utilized the immortalized human mammary epithelial cell line MCF-10A. In monolayer culture, expression of Gab2 at levels comparable with those detected in human breast cancer cells accelerated epidermal growth factor (EGF)-induced cell cycle progression and was associated with increased basal Stat5 tyrosine phosphorylation and enhanced and/or more sustained EGF-induced Erk and Akt activation. Three-dimensional Matrigel culture of MCF-10A cells resulted in the formation of polarized, growth-arrested acini with hollow lumina. Under these conditions, Gab2 increased cell proliferation during morphogenesis, leading to significantly larger acini, an effect dependent on Gab2 binding to Grb2 and Shp2 and enhanced by recruitment of the p85 subunit of phosphatidylinositol 3-kinase. Pharmacological inhibition of MEK revealed that, in addition to direct activation of phosphatidylinositol 3-kinase, increased Erk signaling also contributed to Gab2-mediated enhancement of acinar size. In addition, Gab2 overcame the proliferative suppression that normally occurs in late stage cultures and conferred independence of the morphogenetic program from exogenous EGF. Finally, higher levels of Gab2 expression led to the formation of large disorganized structures with defective luminal clearance. These findings support a role for Gab2 in mammary tumorigenesis.