Trastuzumab and trastuzumab-based treatments are the standard of care for breast cancer patients who overexpress the human epidermal growth factor receptor 2 (HER2). However, patients often develop resistance to trastuzumab via signaling from alternative growth factor receptors that converge to activate guanine nucleotide exchange factors (GEFs) that in turn activate the Rho GTPases Rac and Cdc42. Since Rac and Cdc42 have been implicated in high tumor grade and therapy resistance, inhibiting the activity of Rac and Cdc42 is a rational strategy to overcome HER2-targeted therapy resistance. Therefore, our group developed MBQ-167, a dual Rac/Cdc42 inhibitor with IC50s of 103 nM and 78 nM for Rac and Cdc42, respectively, which is highly effective in reducing cell and tumor growth and metastasis in breast cancer cell and mouse models. Herein, we created a trastuzumab resistant variant of the SKBR3 HER2 positive breast cancer cell line and show that Rac activation is a central mechanism in trastuzumab resistance. Next, we tested the potential of targeting MBQ-167 to HER2 overexpressing trastuzumab-resistant cell lines in vitro, and show that MBQ-167, but not trastuzumab, reduces cell viability and induces apoptosis. When MBQ-167 was targeted to mammary fatpad tumors established from HER2 overexpressing cells via immunoliposomes functionalized with trastuzumab, MBQ-167 and MBQ-167-loaded liposomes show equal efficacy in reducing the viability of trastuzumab-resistant cells, inhibiting tumor growth in mouse xenografts, and reducing metastasis to lungs and liver. This study demonstrates the efficacy of MBQ-167 as an alternative therapeutic in HER2 overexpressing cancers, delivered either in free form or in liposomes.