The double-stranded RNA (dsRNA)-activated protein kinase PKR is an interferon (IFN)-induced enzyme that controls protein synthesis through phosphorylation of eukaryotic initiation factor 2alpha (eIF-2alpha). PKR also regulates signals initiated by diverse stimuli, including dsRNA, IFN-gamma, tumor necrosis factor-alpha, interleukin-1 and lipopolysaccharide, to different transcription factors, resulting in pro-inflammatory gene expression. Stat3 plays an essential role in promoting cell survival and proliferation by different growth factors, including platelet-derived growth factor (PDGF). Here we show that PKR physically interacts with Stat3 and is required for PDGF-induced phosphorylation of Stat3 at Tyr705 and Ser727, resulting in DNA binding and transcriptional activation. PKR-mediated phosphorylation of Stat3 on Ser727 is indirect and channeled through ERKS: Although PKR is pre-associated with the PDGF beta-receptor, treatment with PDGF only modestly activates PKR. However, the induction of c-fos by PDGF is defective in PKR-null cells. Taken together, these results establish PKR as an upstream regulator of activation of Stat3 and as a common mediator of both growth-promoting and growth-inhibitory signals.