HPP1, a novel tumor suppressive epidermal growth factor (EGF)-like ligand, mediates its effects through signal transducer and activators of transcription (STAT) activation. We previously demonstrated the importance of STAT1 activation for HPP1 function; however the contribution of STAT2 remains unclear. We sought to delineate the components of JAK-STAT-interferon (IFN) signaling specifically associated with HPP1s biological effects. Using stable HPP1-HCT116 transfectants, expression analyses were performed by polymerase chain reaction (PCR)/western blotting while expression knockdowns were achieved using siRNA. Growth parameters evaluated included proliferation, cell cycle distribution, and anchorage-independent growth. STAT dimerization, translocation, and DNA binding were examined by reporter assays, fluorescent microscopy, and chromatin immunoprecipitation (ChIP), respectively. Forced expression of HPP1 in colon cancer cell lines results in the upregulation of total and activated levels of STAT2. We have also determined that JAK1 and JAK2 are activated in response to HPP1 overexpression, and are necessary for subsequent STAT activation. Overexpression of HPP1 was associated with significant increases in STAT1:STAT1 (p=0.007) and STAT1:STAT2 (p=0.036) dimer formation, as well as subsequent nuclear translocation. By ChIP, binding of activated STAT1 and STAT2 to the interferon-signaling regulatory element promoter sites of the selected genes, protein kinase RNA-activated (PKR), IFI44, and OAS1 was demonstrated. STAT2 knockdown resulted in partial abrogation of HPP1s growth suppressive activity with increased proliferation (p<0.0001), reduced G1/G0 phase cell cycle fraction, and a restoration of growth potential in soft agar (p<0.01). Presumably as a consequence of upregulation of IFN signaling elements, HPP1 overexpression resulted in an acquisition of exogenous IFN sensitivity. Physiologic doses of IFN-α resulted in a significant reduction in proliferation (p<0.001) and increase in G1/G0 cell cycle arrest in HPP1 transfectants. STAT2 is necessary for HPP1-associated growth suppression, and mediates these effects through activation of IFN-α pathways. Given the interest in therapeutic targeting of oncogenic erbB proteins, further understanding of HPP1s role as a tumor suppressive EGF-like ligand is warranted.