Inclusion Criteria:

• Histologically confirmed pancreatic adenocarcinoma that is metastatic or unresectable.
• Previously untreated with chemotherapy in the metastatic setting. Prior 5-FU or capecitabine treatment is allowed if 1) it was given as part of a combined modality chemoradiation regimen and 2) no greater than 30% of bone marrow was included in the field and 3) the treatment free interval has been > 6 weeks
• Must have measurable disease, defined as at least one lesion that can be measured in at least one dimension (longest diameter to be recorded) as >20 mm with conventional techniques or as >10 mm with spiral CT scan.
• Age greater than or equal to 18 years
• Because no dosing or adverse event data are currently available on the use of capecitabine in combination with gemcitabine and erlotinib in patients <18 years of age, children are excluded from this study.

Pancreatic adenocarcinoma is primarily a disease of the elderly.

• ECOG performance status less than or equal to 2 (Karnofsky greater than or equal to 60%).
• Life expectancy greater than 8 weeks

• Must have normal organ and marrow function as defined below:

  1. leukocytes, greater than or equal to 3,000/μl
  2. absolute neutrophil count, greater than or equal to 1,500/μl
  3. platelets, greater than or equal to100,000/μl
  4. total bilirubin, less than or equal to 2.5 X institutional upper limit of normal
  5. AST(SGOT)/ALT(SGPT), less than or equal to 2.5 X institutional upper limit of normal
  6. AST(SGOT)/ALT(SGPT), less than or equal to 5 X institutional upper limit of normal in patients with liver metastasis
  7. creatinine, less than or equal to 1.5 X institutional upper limit of normal
  8. creatinine clearance, > 30 ml/min (Cockcroft-Gault method)
• Has a negative serum or urine pregnancy test within 7 days prior to initiation of therapy (female patients of childbearing potential).
• Postmenopausal women must have been amenorrheic for at least 12 months to be considered of non-childbearing potential. Patients will agree to continue contraception for 30 days from the date of the last study drug administration.
• Ability to understand and the willingness to sign a written informed consent document.

Exclusion Criteria:

• Prior chemotherapy for pancreatic adenocarcinoma in the metastatic setting are not eligible.
• Chemoradiation within the last 6 weeks prior to registration are not eligible
• Known allergy or severe reactions to gemcitabine, capecitabine, or tyrosine kinase inhibitors are not eligible
• May not be receiving any other investigational agents or received investigational agents within the 28 days prior to registration.
• Known brain metastases are excluded from this clinical trial because of their poor prognosis and because they often develop progressive neurological dysfunction that would confound the evaluation of neurological and other adverse events.
• Prior malignancy in the last 3 years, except basal cell carcinoma, squamous cell, or in-situ cervical cancer
• ECOG PS 3-4
• Uncontrolled intercurrent illness including, but not limited to, ongoing or active infection, symptomatic congestive heart failure, unstable angina pectoris, cardiac arrhythmia, or psychiatric illness/social situations that would limit compliance with study requirements.
• Pregnant women are excluded from this study because gemcitabine and capecitabine are Class D agents with the potential for teratogenic or abortifacient effects.
• Patients with immune deficiency are at increased risk of lethal infections when treated with marrow-suppressive therapy. Therefore, HIV-positive patients receiving combination anti-retroviral therapy are excluded from the study because of possible pharmacokinetic interactions with erlotinib or other agents administered during the study.
• Creatinine clearance < 30 ml/min (Cockcroft-Gault method)
• Patients that require ongoing (chronic) treatment with medications metabolized by CYP3A4 (saquinavir, ritonavir, nelfinavir, indinavir, ketoconazole, itraconazole, nefazodone, clarithromycin, atazanavir, rifampicin, rifabutin, rifapentine, phenytoin, carbamazepine, phenobarbital, St. John's Wort) who cannot be switched to alternate medications that are not metabolized by CYP3A4 are excluded.