The HER‐2/neu oncogene encodes a 185 kD protein that is phosphorylated upon ligand binding to other HER/erbB members and regulates cell growth and differentiation. Given that HER‐2 receptor blockade can inhibit the growth of colon cancer cell lines and tumor xenografts, we investigated the frequency, localization and phosphorylation status of HER‐2 in colon cancer cell lines and in human tumors. Protein expression was analyzed in relation to mRNA levels, HER‐2 amplification, and clinicopathological variables. Colon cancer cell lines constitutively expressed HER‐2 proteins and none showed HER‐2 amplification by fluorescence in situ hybridization. Cell fractionation and immunoblotting showed HER‐2 in both the membrane and cytosolic compartments. Primary colorectal carcinomas (n = 96) and their metastases (n = 25) were examined by immunohistochemistry. Strong membrane HER‐2 staining was detected in 5 (5%) of primaries and in 3 (12%) metastases (p = 0.36). Membrane but not cytoplasmic localization was strongly associated with HER‐2 gene amplification (p = 0.007). Cytoplasmic HER‐2 staining was found in 61 (63.5%) of primary tumors and localization was confirmed by immunoelectron microscopy that also showed plasma membrane HER‐2. Using real‐time quantitative RT‐PCR, HER‐2 mRNA was increased in tumors with membrane compared to cytoplasmic staining (r = 0.66, p = 0.001). Cytoplasmic HER‐2 was associated with tumor differentiation (p = 0.018), but not other clinicopathological variables. By immunoblotting, heterogeneity was seen in HER‐2 levels with downregulation in 4 of 7 tumors relative to normal epithelia that uniformly expressed HER‐2. Phosphorylated HER‐2 was detected in approximately 50% of tumors and in normal mucosa. In conclusion, HER‐2 is expressed constitutively in colon cancer cell lines and demonstrates relatively distinct localization patterns in human tumors. Strong membrane immunoreactivity is associated with high levels of HER‐2 mRNA and gene amplification whereas cytoplasmic HER‐2 is detected frequently and seems to be a marker of tumor differentiation. © 2003 Wiley‐Liss, Inc.