STAT proteins are a group of latent cytoplasmic transcription factors which function as signal transducers and activators of transcription. Stat1 and -2 were originally identified to function in interferon signaling, and Stat1 was also found to be activated by epidermal growth factor (EGF) and other cytokines. New members of the STAT gene family are identified. Among them, Stat3 has 52.5% amino acid sequence homology with Stat1 and is activated by platelet-derived growth factor (PDGF), colony-stimulating factor 1 (CSF-1), EGF, interleukin-6, and other cytokines. Treatment of cells with EGF activates Stat1 and Stat3, which become phosphorylated on tyrosine residues to form homo - or heterodimers and translocate into the nucleus, binding to the sis-inducible element (SIE) in the c-fos promoter. Somatic cell genetic analyses demonstrated that Jaks, a family of nontransmembrane protein tyrosine kinases, are required for the activation of Stat1 and Stat2 in interferon-treated cells. However, little is known about the activation of Stat3 by growth factors. Here we report that in all v-Src-transformed cell lines examined, Stat3 is constitutively activated to bind to DNA and the phosphorylation of tyrosine on Stat3 is enhanced by the induction of v-Src expression. We also report that Src is shown to be associated with Stat3 in vivo, as well as in vitro, and phosphorylates Stat3 in vitro. Stat3 is also activated by CSF-1, possibly through CSF-1 receptor-c Src association in NIH 3T3 cells overexpressing CSF-1 receptors. Together, the data suggest that Src is involved in activation of Stat3 in growth factor signal transduction.