Based on the reports of the activation of the transcription factor known as STAT3 (for signal transducers and activators of transcription) or APRF (for acute phase response factor) by various cytokines, we investigated the possible role of STAT3 in type I interferon (IFN) receptor signaling. We show that STAT3 undergoes IFNalpha-dependent tyrosine phosphorylation and IFNalpha treatment induces protein-DNA complexes that contain STAT3. In addition, STAT3 associates with the IFNAR-1 chain of the type I receptor in a tyrosine phosphorylation-dependent manner upon IFNalpha addition. The binding of STAT3 to the IFNAR-1 chain occurs through a direct interaction between the SH2 domain-containing portion of STAT3 and the tyrosine-phosphorylated IFNAR-1 chain. Furthermore, tyrosine-phosphorylated STAT3 bound to the IFNAR-1 chain also undergoes a secondary modification involving serine phosphorylation. This phosphorylation event is apparently mediated by protein kinase C, since it was blocked by low concentrations of the protein kinase inhibitor H-7. The biological relevance of IFN activation of STAT3 is further illustrated by the finding that STAT3 is not activated by IFN in a cell line resistant to the antiviral and antiproliferative actions of IFN alpha but in which other components of the JAK-STAT pathway are activated by IFNalpha.