Signal transducer and activator of transcription 3 (Stat3) is activated in a variety of malignancies, including hepatocellular carcinoma (HCC). Activation of Ras occurs frequently at advanced stages of HCC by aberrant signaling through growth factor receptors or inactivation of effectors negatively regulating Ras signaling. Here, we addressed the role of Stat3 in Ras-dependent HCC progression in the presence and absence of p19ARF/p14ARF. We show that constitutive active (ca) Stat3 is tumor suppressive in Ras-transformed p19ARF−/− hepatocytes, whereas the expression of Stat3 lacking Tyr705 phosphorylation (U-Stat3) enhances tumor formation. Accordingly, Ras-transformed Stat3Δhc/p19ARF−/− hepatocytes (lacking Stat3 and p19ARF) showed increased tumor growth, compared to those expressing Stat3, demonstrating a tumor-suppressor activity of Stat3 in cells lacking p19ARF. Notably, endogenous expression of p19ARF in Ras-transformed hepatocytes conveyed oncogenic Stat3 functions, resulting in augmented or reduced HCC progression after the expression of caStat3 or U-Stat3, respectively. In accord with these data, the knockdown of p14ARF (the human homolog of p19ARF) in Hep3B cells was associated with reduced pY-Stat3 levels during tumor growth to circumvent the tumor-suppressive effect of Stat3. Inhibition of Janus kinases (Jaks) revealed that Jak causes pY-Stat3 activation independently of p14ARF levels, indicating that p14ARF controls the oncogenic function of pY-Stat3 downstream of Jak. Conclusion: These data show evidence that p19ARF/p14ARF determines the pro- or anti-oncogenic activity of U-Stat3 and pY-Stat3 in Ras-dependent HCC progression. (HEPATOLOGY 2011;)