STATs (signal transducers and activators of transcription) are transcription factors that contain SH2 domains and are activated by tyrosine phosphorylation, often in response to cytokine stimulation. Recent evidence indicates that the transforming tyrosine kinases encoded by the v-Src, v-Abl, and v-Fps oncogenes can induce STAT activation, suggesting that their normal cellular homologs may contribute to STAT activation under physiological conditions. In this report, we provide direct evidence that c-Fes, the normal human homolog of v-Fps, potently activates STAT3. Transient transfection of human 293T cells with STAT3 and Fes resulted in strong stimulation of STAT3 DNA binding activity. In contrast, only modest activation of STAT5 by Fes was observed in this system, indicative of possible selectivity. To determine whether Fes-induced STAT3 activation is dependent upon endogenous mammalian kinases, co-expression studies were also performed in Sf-9 insect cells. Fes also induced a dramatic increase in STAT3 DNA binding activity in this system, whereas no activation of STAT5 was observed. As a positive control, both STAT3 and STAT5 were shown to be activated by the Bcr-Abl tyrosine kinase in Sf-9 cells. Fes induced strong tyrosine phosphorylation of STAT3 in both expression systems, consistent with the gel-shift results. Fes and STAT3 have been independently linked to myeloid differentiation. Results presented here suggest that these proteins may cooperate to promote differentiation signaling in response to hematopoietic cytokines.