Stat3 activity is required for transformation by a number of oncogenes.  Signalling through Stat3 is determined by a key phosphorylation at tyr-705. We previously demonstrated that the nuclear Large Tumor antigen of Simian Virus 40 (TAg) requires Ras for transformation. Since the Ras and Stat3 pathways are often coordinately regulated by growth factors and oncogenes, we examined the role of Stat3 upon transformation by TAg. Unexpectedly, the results demonstrated that cell to cell adhesion alone, brought about through confluence of cultured cells or cell aggregation, can cause a dramatic increase in Stat3 activity, which could be abolished by Calcium chelation. To investigate the role of Stat3 in neoplastic transformation by TAg, murine fibroblasts were rendered deficient in Stat3 activity through expression of a Stat3-specific siRNA or a Cre-loxP recombination system. The results demonstrate that growth rate, formation of foci overgrowing a monolayer of normal cells and colony formation in soft agar were dramatically reduced in Stat3-deficient cells. In addition, TAg expression led to increased Stat3-tyr705 phosphorylation, DNA binding and transcriptional activity, suggesting that Stat3 is required for TAg-mediated neoplasia. Taken together, our results suggest that Stat3 is an important component of a pathway emanating from TAg and leading to neoplastic conversion.