The STAT3 (signal transducer and activator of transcription) transcription factor functions as down-stream effector of growth factor signaling. Whereas STAT3 activation is transient in normal cells, constitutively activated forms of the transcription factor have been detected in several cancer cell lines and primary tumors. Through the up-regulation of cell cycle and survival genes, STAT3 plays important roles in cell growth, anti-apoptosis, and cell transformation yet the molecular basis for this behavior is poorly understood. In this study, we show that STAT3 and its transcriptional cofactors are recruited to the promoter of the Cdc25A gene to activate its expression. Using chromatin immunoprecipitations, we observed that Myc is recruited to this promoter following STAT3 DNA binding. Moreover, small interfering RNA-mediated knockdown of Myc specifically inhibits the STAT3-mediated activation of Cdc25A. Reduction in Myc protein level results in defective recruitment of the CREB-binding protein, Cdk9, and RNA polymerase complexes, indicating that Myc is necessary for STAT3 transcription. Surprisingly, the association of STAT3 with the Cdc25A promoter does not necessarily lead to transcriptional induction because this protein also functions as a transcriptional repressor of the Cdc25A gene. Following hydrogen peroxide stimulation, STAT3 forms a repressor complex with the retinoblastoma (Rb) tumor suppressor to occupy the Cdc25A promoter and block its induction. In coimmunoprecipitations and ChIP experiments, Rb was found to associate with STAT3 on DNA and we provide evidence that Rb binds directly to the transcription factor. Thus, we propose that Myc and STAT3 cooperate to induce the expression of Cdc25A and that their transcriptional activity is normally regulated by the Rb tumor suppressor gene.