Interferons (IFNs) inhibit the growth of infectious pathogens and tumor development. Although IFNs are potent tumor suppressors, they modestly inhibit the growth of some human solid tumors. Their weak activity against such tumors is augmented by co-treatment with differentiation-inducing agents such as retinoids. Previous studies from our laboratory identified a novel gene product, gene associated with retinoid-interferon-induced mortality (GRIM)-19, as an IFN/all-trans retinoic acid-induced growth suppressor. However, the mechanisms of its growth suppressive actions are unclear. The src-family of tyrosine kinases is important regulators of various cell growth responses. Mutational activation of src causes cellular transformation by altering transcription and cytoskeletal properties. In this study, we show that GRIM-19 suppresses src-induced cellular transformation in vitro and in vivo by down-regulating the expression of a number of signal transducer and activator of transcription-3 (STAT3)-dependent cellular genes. In addition, GRIM-19 inhibited the src-induced cell motility and metastasis by suppressing the tyrosyl phosphorylation of focal adhesion kinase, paxillin, E-cadherin, and gamma-catenin. Effects of GRIM-19 on src-induced cellular transformation are reversible in the presence of specific short hairpin RNA, indicating its direct effect on transformation. GRIM-19-mediated inhibition of the src-induced tyrosyl phosphorylation of cellular proteins, such as focal adhesion kinase and paxillin, seems to occur independently of the STAT3 protein. GRIM-19 had no significant effect on the cellular transformation induced by other oncogenes such as myc and Ha-ras. Thus, GRIM-19 not only blocks src-induced gene expression through STAT3 but also the activation of cell adhesion molecules.