Stimulation of epidermal growth factor receptor (EGFR) by ligand(s) leads to activation of signaling molecules including Stat1 and Stat3, two members of the signal transducers and activators of transcription (STAT) protein family. Activation of Stat1 and Stat3 was constitutive in transformed squamous epithelial cells, which produce elevated levels of TGF-alpha, and was enhanced by the addition of exogenous TGF-alpha. Targeting of Stat3 using antisense oligonucleotides directed against the translation initiation site, resulted in significant growth inhibition. In addition, cells stably transfected with dominant negative mutant Stat3 constructs failed to proliferate in vitro. In contrast, targeting of Stat1 using either antisense or dominant-negative strategies had no effect on cell growth. Thus, TGF-alpha/EGFR-mediated autocrine growth of transformed epithelial cells is dependent on activation of Stat3 but not Stat1.