To identify proteins that regulate the transcriptional activity of c-Jun, we have used the yeast two-hybrid screen to detect mammalian polypeptides that might interact functionally with the N-terminal segment of c-Jun, a known regulatory region. Among the proteins identified is a short form of Stat3 (designated Stat3 beta). Stat3 beta is missing the 55 C-terminal amino acid residues of the long form (Stat3 alpha) and has 7 additional amino acid residues at its C terminus. In the absence of added cytokines, expression of Stat3 beta (but not Stat3 alpha) in transfected cells activated a promoter containing the interleukin 6 responsive element of the rat alpha 2-macroglobulin gene; coexpression of Stat3 beta and c-Jun led to enhanced cooperative activation of the promoter. Nuclear extracts of cells transfected with a Stat3 beta expression plasmid formed a complex with an oligonucleotide containing a Stat3 binding site, whereas extracts of cells transfected with a Stat3 alpha plasmid did not. We conclude that there is a short form of Stat3 (Stat3 beta), that Stat3 beta is transcriptionally active under conditions where Stat3 alpha is not, and that Stat3 beta and c-Jun are capable of cooperative activation of certain promoters.