We previously showed that Gi2 proteins interfere with the transduction of CSF-1 receptor (CSF-1R) proliferation signals (Corre and Hermouet, 1995). To identify CSF-1R pathways controlled by Gi2, we transfected v-fms, the oncogenic equivalent of CSF-1R, in NIH3T3 cells in which Gi2 proteins were inactivated by stably expressing a dominant negative mutant form of the alpha subunit of Gi2 (alpha i2-G204A). Expression of alpha i2-G204A resulted in decreased Src-kinase activity, delayed activation of p42 ERK-MAPK, decreased cyclin D1 expression and reduced proliferation in response to serum. In alpha i2-G204A cells transfected with v-fms, Src-kinase activity remained deficient but p42 MAPK activity and cyclin D1 expression were similar to those of vector/v-fms cells, suggesting that v-fms bypasses Src to activate the ERK-MAPK cascade. However, DNA synthesis and focus formation were inhibited by up to 80% in alpha i2-G204A/v-fms cells compared to vector/v-fms cells. We found that tyrosine phosphorylation of STAT3, also activated by CSF-1R/v-fms, was inhibited in alpha i2-G204A/v-fms cells; in addition, expression of an 85 kDa, C-terminal truncated form of STAT3 (STAT3 delta) was constitutively increased. Both the inhibition of v-fms-induced STAT3 tyrosine phosphorylation and the increased expression of STAT3 delta were reproduced by transfecting a dominant negative mutant of Src. Last, we show that expression of STAT3 delta 55C, a mutant form of STAT3 lacking the last 55 C-terminal amino acids, is sufficient to inhibit DNA synthesis and v-fms-induced transformation in NIH3T3 cells. In summary, adequate regulation by Gi2 proteins of the activity of both Src-kinase and STAT3 is required for optimal cell proliferation in response to CSF-1R/v-fms.