The tumor suppressor, LKB1 (STK11) is a cytoplasmic/nuclear serine/threonine kinase, defects in which cause Peutz-Jeghers syndrome (PJS) in humans and animals. Recent studies showed that loss of function of LKB1 is associated with sporadic forms of lung, pancreatic and ovarian cancer. In cancer cells, LKB1 is inactivated by two mechanisms: mutations in its central kinase domain, or complete loss of LKB1 expression. Inactivation of LKB1 is associated with progression of PJS and transformation of benign polyps into malignant tumors. This study examines the effect of LKB1 on regulation of STAT3 and expression of transcriptional targets of STAT3. The results show that LKB1 inhibits RET/PTC-dependent activation of STAT3, which is mediated by phosphorylation of STAT3 tyrosine 705 by RET/PTC. Suppression of STAT3 transactivation by LKB1 requires the kinase domain but not the kinase activity of LKB1. The centrally-located kinase domain of LKB1 is an approximately 260 amino acid region that binds to the linker domain of STAT3. Chromatin immunoprecipitation studies indicate that expression of LKB1 reduces the binding of STAT3 to its target promoters, and suppresses STAT3-mediated expression of Cyclin D1, VEGF, and Bcl-xL. Knockdown of LKB1 by specific siRNA led to an increase in STAT3 transactivation activity and promoted cell proliferation in the presence of RET/PTC. Thus, this study suggests that LKB1 suppresses tumor growth by inhibiting RET/PTC-dependent activation of oncogenic STAT3.