Signal transducer and activator of transcription (STAT) proteins perform key roles in mediating signaling by cytokines and growth factors, including platelet-derived growth factor (PDGF). In addition, Src family kinases activate STAT signaling and are required for PDGF-induced mitogenesis in normal cells. One STAT family member, Stat3, has been shown to have an essential role in cell transformation by the Src oncoprotein. However, the mechanisms by which STAT-signaling pathways contribute to mitogenesis and transformation are not fully defined. We show here that disruption of Stat3 signaling by using dominant-negative Stat3beta protein in NIH 3T3 fibroblasts suppresses c-Myc expression concomitant with inhibition of v-Src-induced transformation. Ectopic expression of c-Myc is able to partially reverse this inhibition, suggesting that c-Myc is a downstream effector of Stat3 signaling in v-Src transformation. Furthermore, c-myc gene knockout fibroblasts are refractory to transformation by v-Src, consistent with a requirement for c-Myc protein in v-Src transformation. In normal NIH 3T3 cells, disruption of Stat3 signaling with dominant-negative Stat3beta protein inhibits PDGF-induced mitogenesis in a manner that is reversed by ectopic c-Myc expression. Moreover, inhibition of Src family kinases with the pharmacologic agent, SU6656, blocks Stat3 activation by PDGF. These findings, combined together, delineate the signaling pathway, PDGF --> Src --> Stat3 --> Myc, that is important in normal PDGF-induced mitogenesis and subverted in Src transformation.