Variant rs351855-G/A is a commonly occurring single-nucleotide polymorphism of coding regions in exon 9 of the fibroblast growth factor receptor FGFR4 (CD334) gene (c.1162G>A). It results in an amino-acid change at codon 388 from glycine to arginine (p.Gly388Arg) in the transmembrane domain of the receptor. Despite compelling genetic evidence for the association of this common variant with cancers of the bone, breast, colon, prostate, skin, lung, head and neck, as well as soft-tissue sarcomas and non-Hodgkin lymphoma, the underlying biological mechanism has remained elusive. Here we show that substitution of the conserved glycine 388 residue to a charged arginine residue alters the transmembrane spanning segment and exposes a membrane-proximal cytoplasmic signal transducer and activator of transcription 3 (STAT3) binding site Y(390)-(P)XXQ(393). We demonstrate that such membrane-proximal STAT3 binding motifs in the germline of type I membrane receptors enhance STAT3 tyrosine phosphorylation by recruiting STAT3 proteins to the inner cell membrane. Remarkably, such germline variants frequently co-localize with somatic mutations in the Catalogue of Somatic Mutations in Cancer (COSMIC) database. Using Fgfr4 single nucleotide polymorphism knock-in mice and transgenic mouse models for breast and lung cancers, we validate the enhanced STAT3 signalling induced by the FGFR4 Arg388-variant in vivo. Thus, our findings elucidate the molecular mechanism behind the genetic association of rs351855 with accelerated cancer progression and suggest that germline variants of cell-surface molecules that recruit STAT3 to the inner cell membrane are a significant risk for cancer prognosis and disease progression.