We investigated a Spanish and Catalan family in which multiple cancer types tracked across three generations, but for which no genetic etiology had been identified. Whole-exome sequencing of germline DNA from multiple affected family members was performed to identify candidate variants to explain this occurrence of familial cancer. We discovered in all cancer-affected family members a single rare heterozygous germline variant (I654V, rs1801201) in ERBB2/HER2, which is located in a transmembrane glycine zipper motif critical for ERBB2-mediated signaling and in complete linkage disequilibrium (D ¼ 1) with a common polymorphism (I655V, rs1136201) previously reported in some populations as associated with cancer risk. Because multiple cancer types occurred in this family, we tested both the I654V and the I655V variants for association with cancer across multiple tumor types in 6,371 cases of Northern European ancestry drawn from The Cancer Genome Atlas and 6,647 controls, and found that the rare variant (I654V) was significantly associated with an increased risk for cancer (OR ¼ 1.40; P ¼ 0.021; 95% confidence interval (CI), 1.05-1.89). Functional assays performed in HEK 293T cells revealed that both the I655V single mutant (SM) and the I654V;I655V double mutant (DM) stabilized ERBB2 protein and activated ERBB2 signaling, with the DM activating ERBB2 significantly more than the SM alone. Thus, our results suggest a model whereby heritable genetic variation in the transmembrane domain activating ERBB2 signaling is associated with both sporadic and familial cancer risk, with increased ERBB2 stabilization and activation associated with increased cancer risk. Prevention Relevance: By performing whole-exome sequencing on germline DNA from multiple cancer-affected individuals belonging to a family in which multiple cancer types track across three generations, we identified and then characterized functional common and rare variation in ERBB2 associated with both sporadic and familial cancer. Our results suggest that heritable variation activating ERBB2 signaling is associated with risk for multiple cancer types, with increases in signaling correlated with increases in risk, and modified by ancestry or family history.