A number of studies have demonstrated that the STAT pathway is an important signaling cascade utilized by the IL-6 cytokine family to regulate a variety of cell functions. However, the downstream target genes of STAT activation that mediate the cytokine-induced cellular responses are largely uncharacterized. The aims of the current study are to determine whether the STAT signaling pathway is critically involved in the oncostatin M (OM)-induced growth inhibition and morphological changes of MCF-7 cells and to identify STAT3-target genes that are utilized by OM to regulate cell growth and morphology. We show that expression of a dominant negative (DN) mutant of STAT3 in MCF-7 cells completely eliminated the antiproliferative activity of OM, whereas expression of DN STAT1 had no effect. The growth inhibition of breast cancer cells was achieved through a concerted action of OM on cell cycle components. We have identified four cell cycle regulators including c-myc, cyclin D1, c/EBPdelta, and p53 as downstream effectors of the OM-activated STAT3 signaling cascade. The expression of these genes is differentially regulated by OM in MCF-7 cells, but is unaffected by OM in MCF-7-dnStat3 stable clones. We also demonstrate that the OM-induced morphological changes are correlated with increased cell motility in a STAT3-dependent manner. Expression analysis of extracellular matrix (ECM) proteins leads to the identification of fibronectin as a novel OM-regulated ECM component. Our studies further reveal that STAT3 plays a key role in the robust induction of fibronectin expression by OM in MCF-7 and T47D cells. These new findings provide a molecular basis for the mechanistic understanding of the effects of OM on cell growth and migration.