Cells in normal tissues or in tumors have extensive opportunities for adhesion to their neighbors and the importance of cell to cell contact in the study of fundamental cellular processes is beginning to emerge. In this review, we discuss recent evidence of dramatic changes in the activity of an important signal transducer found to be profoundly affected by cell to cell adhesion, the signal transducer and activator of transcription-3 (Stat3). Direct cadherin engagement, growth of cells to postconfluence, or formation of multicellular aggregates were found to induce a striking increase in the levels of Stat3 activity, Rac1/Cdc42, and members of the IL6 receptor family in different settings. This activation was specific to Stat3, in that the levels of the extracellular signal regulated kinase (Erk1/2), a signal transducer often coordinately activated with Stat3 by a number of growth factors or oncogenes, remained unaffected by cell density. Density-dependent Stat3 activation may play a key role in survival, and could contribute to the establishment of cell polarity. It is clear that at any given time the total Stat3 activity levels in a cell are the sum of the effects of cell to cell adhesion plus the conventional Stat3 activating factors present.