Signal transducer and activator of transcription (Stat)3 is constitutively activated in cutaneous T-cell lymphoma (CTCL), where it protects tumour cells against apoptosis. The constitutive activation of Stat3 leads to a constitutive expression of suppressor of cytokine signalling (SOCS)-3. In healthy cells, SOCS-3 is transiently expressed following cytokine stimulation and functions as a negative feedback inhibitor of the Stat3-activating kinases. Here, we attempt to resolve the apparent paradox of a simultaneous SOCS-3 expression and Stat3 activation in the same cells. We show that (i) SOCS-3 expression in tumour cells is equal to or higher than in cytokine-stimulated nonmalignant T cells, (ii) SOCS-3 is not mutated in CTCL, (iii) overexpression of SOCS-3 blocks IFNalpha-mediated growth inhibition without affecting Stat3 activation, growth, and apoptosis, and (iv) inhibition of SOCS-3 by a dominant negative Stat3 (Stat3D) increases the IFNalpha-mediated growth inhibition. Taken together, these data show that SOCS-3 does not inhibit Stat3 activation, growth, and survival in CTCL. In contrast, SOCS3 protects tumour cells against growth inhibition by IFNalpha. Unlike SOCS-1, SOCS-3 is therefore not a tumour suppressor but rather a protector of tumour cells.