Gamma interferon (IFN-gamma) is a regulator of cell growth, which suppresses the proliferation of HT-29 colon carcinoma cells. Here we show that in HT-29 cells IFN-gamma transiently increased the cellular level of the tyrosine kinase Fer, whose functioning was found to be essential for the proliferation of malignant cell-lines. The transient elevation in the level of Fer, was followed by its down-regulation, an effect which was most prominent after 6-8 h of IFN-gamma treatment. Up- and down-regulation of Fer was paralleled by the activation and subsequent deactivation of Stat3, which is a potent oncogene and a putative substrate of the tyrosine kinase Fer. Moreover, IFN-gamma induced the association of Fer and Stat3 and the newly formed complex was most stable at the down-regulated states of the two proteins. Formation of the Fer/Stat3 complex was accompanied by an attenuation in cell-cycle progression and accumulation of cells in the G1 phase. Thus, Fer and Stat3 are two proliferation-promoting factors whose down-regulation could contribute to the cytostatic activity of IFN-gamma in colon carcinoma cells.