Abstract Background Stat3 is a cytokine- and growth factor-inducible transcription factor that regulates cell motility, migration, and invasion under normal and pathological situations, making it a promising target for cancer therapeutics. The hepatocyte growth factor (HGF)/c-met receptor tyrosine kinase signaling pathway is responsible for stimulation of cell motility and invasion, and Stat3 is responsible for at least part of the c-met signal. Methods We have stably transfected a human squamous cell carcinoma (SCC) cell line (SRB12-p9) to force the expression of a dominant negative form of Stat3 (S3DN), which we have previously shown to suppress Stat3 activity. The in vitro and in vivo malignant behavior of the S3DN cells was compared to parental and vector transfected controls. Results Suppression of Stat3 activity impaired the ability of the S3DN cells to scatter upon stimulation with HGF (c-met ligand), enhanced their adhesion, and diminished their capacity to invade in vitro and in vivo. Surprisingly, S3DN cells also showed suppressed HGF-induced activation of c-met, and had nearly undetectable basal c-met activity, as revealed by a phospho-specific c-met antibody. In addition, we showed that there is a strong membrane specific localization of phospho-Stat3 in the wild type (WT) and vector transfected control (NEO4) SRB12-p9 cells, which is lost in the S3DN cells. Finally, co-immunoprecipitation experiments revealed that S3DN interfered with Stat3/c-met interaction. Conclusion These studies are the first confirm that interference with the HGF/c-met/Stat3 signaling pathway can block tumor cell invasion in an in vivo model. We also provide novel evidence for a possible positive feedback loop whereby Stat3 can activate c-met, and we correlate membrane localization of phospho-Stat3 with invasion in vivo.