Epidermal growth factor (EGF) is a mitogen for most epithelial cells. Paradoxically, the growth of some cultured cell lines, containing high numbers of EGF receptors, are inhibited by EGF. Here we demonstrate that growth inhibition by EGF in several cell lines correlates with the activation of the signal transducer and activator of transcription (Stat) 1. In contrast, in normal fibroblasts and several cell lines that are growth stimulated by EGF, we observed no or very transient activation of Stat1. A causal association between Stat1 activation by EGF and growth inhibition was suggested by the expression of a dominant-negative Stat1 in A431 cells, resulting in the loss of Stat1 DNA binding and concomitant resistance to growth inhibition by EGF. We conclude that, in the cells examined, EGF-induced arrest of growth requires activated Stat1.