Stat proteins are SH2 domain-containing transcription factors that are activated in cells by various cytokines and growth factors. In the case of cytokines whose receptors lack protein kinase activity, phosphorylation-activation is mediated by members of the JAK family of tyrosine protein kinases. In the case of growth factors whose receptors have intrinsic tyrosine protein kinase activity, it is thought that Stat proteins can be activated either directly by the receptor or indirectly through JAK proteins. To test the possibility of direct activation, we have used purified Stat3 alpha, Stat3 beta, and epidermal growth factor receptor kinase produced in recombinant baculovirus-infected Sf9 insect cells. The Stat proteins formed a stable complex with the receptor kinase, and they were phosphorylated on tyrosine by the receptor kinase and activated for binding to DNA, properties shared with Stat proteins purified from Sf9 cells coexpressing JAK1 or JAK2. Both JAK-phosphorylated Stat3 beta and Stat3 beta phosphorylated in vitro by the receptor kinase were 20-50 times more active on a molar basis for DNA binding than phosphorylated Stat3 alpha. We conclude that Stat3 isoforms can be directly phosphorylated and thereby activated in vitro by the epidermal growth factor receptor kinase.