The engagement of cadherins, cell-to-cell adhesion proteins, triggers a dramatic increase in the levels and activity of the Rac/Cdc42 GTPases, through the inhibition of proteasomal degradation. This leads to an increase in transcription and secretion of IL6 family cytokines, activation of their common receptor, gp130, in an autocrine manner and phosphorylation of the signal transducer and activator of transcription-3 (Stat3) on tyrosine-705 by the Jak kinases. Stat3 subsequently dimerizes, migrates to the nucleus and activates the transcription of genes involved in cell division and survival. The Src oncogene also increases Rac levels, leading to secretion of IL6 family cytokines and gp130 activation, which triggers a Stat3-ptyr705 increase. Interestingly, at the same time, Src downregulates cadherins in a quantitative manner, while cadherins are required to preserve gp130 levels for IL6 family signalling. Therefore, a fine balance between Src 527F /Rac/IL6 and Src 527F /cadherin/gp130 levels is in existence, which is required for Stat3 activation. This further demonstrates the important role of cadherins in the activation of Stat3, through preservation of gp130 function. Conversely, the absence of cadherin engagement correlates with low Stat3 activity: In sparsely growing cells, both gp130 and Stat3-ptyr705 levels are very low, despite the fact that cSrc is active in the FAK (focal adhesion kinase)/cSrc complex, which further indicates that the engagement of cadherins is important for Stat3 activation, not just their presence. Furthermore, the caveolin-1 protein downregulates Stat3 through binding and sequestration of cadherins to the scaffolding domain of caveolin-1. We hypothesize that the cadherins/Rac/gp130 axis may be a conserved pathway to Stat3 activation in a number of systems. This fact could have significant implications in Stat3 biology, as well as in drug testing and development.