Signal transducer and activator of transcription 3 (STAT3) is phosphorylated on tyrosine residue 705 in response to growth factors or cytokines to form activated homodimers that drive gene expression. Because the stat3 promoter has a binding site for STAT3 dimers, the amount of STAT3 protein increases when STAT3 is activated (e.g., in response to interleukin 6). Unphosphorylated STAT1 is known to drive the expression of certain genes. To explore the possibility of a similar role for the induced expression of unphosphorylated STAT3, we overexpressed either Y705F STAT3, which can not be phosphorylated on residue 705, or wild-type STAT3 in normal human mammary epithelial cells or STAT3-null mouse cells. The levels of many mRNAs were affected strongly by high levels of either form of STAT3. Some genes whose expression was increased by overexpressed STAT3, but not by activated STAT3 dimers, encode well-known oncoproteins (e.g., MRAS and MET). In many tumors, STAT3 is activated constitutively, and thus the unphosphorylated form is likely to be expressed highly, driving oncogene expression by a novel mechanism. In addition, expression of the stat3 gene is increased strongly in response to interleukin 6, and the high levels of unphosphorylated STAT3 that result drive a substantial late phase of gene expression in response to this cytokine. Thus, unphosphorylated STAT3, which activates gene expression by a novel mechanism distinct from that used by STAT3 dimers, is very likely to be an important transcription factor both in cancer and in responses to cytokines.