A novel simple isocratic stability–indicating LC method has been developed for the estimation of impurities in Erlotinib API and formulation products. Chromatographic separation was achieved in an isocratic elution mode by QbD-approach.  Quality by Design approach to method development uses statistical design of experiments to develop a robust method ‘design space’. The design space defines the experimental region in which changes to method parameters will not significantly affect the results. The present study describes the development of a comprehensive science and risk based HPLC method and subsequent validation for the analysis of Erlotinib drug substances and drug products using a quality by design approach. All the known impurities and unknown impurities were well separated and not interfering with placebo peaks in tablet formulations. The eluted compounds were monitored at 245 nm. Erlotinib was subjected to the stress conditions like oxidative, acid, base, hydrolytic, thermal and photolytic degradation. The degradation products were well resolved from main peak and its impurities, providing the stability- indicating power of the method. The developed method was validated as per international conference on Harmonization guidelines with respect to specificity, limit of detection, limit of quantification, precision, linearity, accuracy, robustness and ruggedness.