The signal transducer and activator of transcription 3 (STAT3) protein is critical for multiple cytokine and growth factor-induced biological responses in vivo. Its transcriptional activity is controlled by a transient phosphorylation of a critical tyrosine. Constitutive activation of STAT3 imparts resistance to apoptosis, promotes cell proliferation, and induces de novo micro-angiogenesis, three of the six cardinal hallmarks of a typical cancer cell. Earlier we reported the isolation of GRIM-19 as a growth suppressor using a genome-wide expression knockdown strategy. GRIM-19 binds to STAT3 and suppresses its transcriptional activity. To understand the pathological relevance of GRIM-19, we screened a set of primary head and neck tumors and identified three somatic mutations in GRIM-19. Wild-type GRIM-19 suppressed cellular transformation by a constitutively active form of STAT3, whereas tumor-derived mutants L71P, L91P and A95T significantly lost their ability to associate with STAT3, block gene expression, and suppress cellular transformation and tumor growth in vivo. Additionally, these mutants lost their capacity to prevent metastasis. These mutations define a mechanism by which STAT3 activity is deregulated in certain human head and neck tumors.