Significant improvements in the outcome of non-small cell lung carcinoma (NSCLC) have been reported in patients treated with the epidermal growth factor receptor (EGFR) inhibitor, erlotinib. To discover biomarkers for the enrichment of patients who might benefit from treatment, a pharmacogenomic approach was used to identify gene signatures that may predict erlotinib activity using in vitro model systems. Erlotinib sensitivity in a panel of 42 NSCLC cell lines was determined by EGFR-mediated proliferative potential, EGFR mutations, and/or EGFR gene amplification, thus supporting an underlying biological mechanism of receptor activation. A strong multigene signature indicative of an epithelial to mesenchymal transition (EMT) was identified as a determinant of insensitivity to erlotinib through both supervised and unsupervised gene expression approaches. This observation was further supported by expression analysis of classic EMT marker proteins, including E-cadherin and vimentin. To investigate the clinical relevance of these findings, we examined expression of the epithelial marker E-cadherin by immunohistochemistry on primary tumor samples from subjects enrolled in a randomized NSCLC clinical trial in which erlotinib in combination with chemotherapy previously failed to show clinical activity. The majority (75%) of the 87 subjects tested showed strong E-cadherin staining and exhibited a significantly longer time to progression (hazard ratio, 0.37; log rank P=0.0028) and a nonsignificant trend toward longer survival with erlotinib plus chemotherapy treatment versus chemotherapy alone. These data support a potential role for EMT as a determinant of EGFR activity in NSCLC tumor cells and E-cadherin expression as a novel biomarker predicting clinical activity of the EGFR inhibitor erlotinib in NSCLC patients.