Elevated Src expression correlates with malignant potential and metastatic disease in many tumors including pancreatic cancer. We sought to characterize the molecular effects of Src kinase inhibition with dasatinib (BMS-354825), a novel, multitargeted kinase inhibitor that targets Src family kinases in pancreatic ductal adenocarcinoma (PDA). We identified sensitive and resistant PDA cell lines to dasatinib treatment and tested the molecular effects of Src inhibition in vitro and in vivo. We show for the first time that cellular localization of Src expression affects survival in patients with PDA. Pancreatic tumors with increased membranous expression of Src resulted in decreased survival compared with tumors that had increased cytoplasmic Src expression. Src kinase inhibition with dasatinib markedly inhibits cell proliferation, migration, invasion, cell cycle progression and anchorage-independent growth, and stimulates apoptosis. This was accompanied by decreased phosphorylation of Src, focal adhesion kinase, paxillin, AKT, signal transducers and activators of transcription 3 (STAT3), extracellular signal-regulated kinase, and mitogen-activated protein kinase (MAPK), as well as decreased cyclin D1 expression in a time- and concentration-dependent manner. Furthermore, small interfering RNA to Src results in a significant decrease in cell proliferation, invasion, and migration of pancreatic cancer cells. Dasatinib treatment also inhibits in vivo pancreatic tumor growth. Mechanisms of resistance to Src inhibition seem to be related to a lack of inhibition of STAT3 and MAPK signaling. These results establish a mechanistic rationale for Src inhibition with dasatinib as a therapeutic target in the treatment of pancreatic cancer and identify potential biomarkers of resistance to Src inhibition.