HER2, a ligand-free tyrosine kinase receptor of the HER family, is frequently overexpressed in breast cancer. The anti-HER2 antibody trastuzumab has shown significant clinical benefits in metastatic breast cancer. Despite the effectiveness of trastuzumab, its efficacy remains variable and often modest. Thus, there is an urgent need to improve ErbB2-targeting therapy. Here, we describe a novel anti-HER2 antibody, 7C3, which was developed using hybridoma technique. Structural analysis confirms that the epitope of this antibody is in domain II/III of HER2. Moreover, a structural conformation change was observed in HER2 in complex with 7C3. Interestingly, this novel anti-HER2 antibody exhibits efficacy in blocking HER2/EGFR heterodimerization and signaling. The results highlight the different function role of HER2 domains and the unique potential of 7C3 to inhibit the HER2/EGFR heterodimer, which may complement current anti-HER2 treatments.