GRIM-19 (gene associated with retinoid-IFN-induced mortality 19), isolated as a cell death activator in a genetic screen used to define mechanisms involved in IFN-beta- and retinoic acid-induced cell death, codes for a approximately 16-kDa protein that induces apoptosis in a number of cell lines. Antisense ablation of GRIM-19 caused resistance to cell death induced by IFN plus retinoic acid and conferred a growth advantage to cells. To understand the molecular bases for its cell death regulatory activity, we used a yeast two-hybrid screen and identified that the transcription factor STAT3 (signal transducer and activator of transcription 3) binds to GRIM-19. GRIM-19 inhibits transcription driven by activation of STAT3, but not STAT1. It neither inhibits the ligand-induced activation of STAT3 nor blocks its ability to bind to DNA. Mutational analysis indicates that the transactivation domain of STAT3, especially residue S727, is required for GRIM-19 binding. Because GRIM-19 does not bind significantly to other STATs, our studies identify a specific inhibitor of STAT3. Because constitutively active STAT3 up-regulates antiapoptotic genes to promote tumor survival, its inhibition by GRIM-19 also demonstrates an antioncogenic effect exerted by biological therapeutics.