In the normal breast, hepatocyte growth factor (HGF) is primarily expressed by stromal cells, and stimulates in a paracrine manner epithelial cells expressing the HGF receptor (Met). In invasive human breast carcinomas, HGF and Met are frequently overexpressed, possibly establishing an autocrine HGF/Met loop that promotes tumour cell invasion. However, the mechanisms leading to autocrine HGF expression in carcinoma cells are not known. We previously demonstrated a cooperative effect between c-Src and Stat3 in the activation of HGF transcription in mammary carcinoma cells. The present report defines a novel Stat3 consensus site at nt− 95 in the HGF promoter that is highly conserved in human and mouse, and is required for c-Src and Stat3 to activate HGF transcription in breast epithelial cells. DNA–protein binding studies demonstrated high affinity binding of a Stat3-containing complex to the nt− 95 site. Endogenous Stat3 binding to this region of the HGF promoter in carcinoma cells expressing HGF was demonstrated using a chromatin immunoprecipitation assay. In addition, coexpression of Stat3 and activated c-Src caused increased expression of endogenous HGF mRNA and protein and marked cell scattering in breast epithelial cells. Our results delineate a novel c-Src/Stat3-dependent mechanism that regulates HGF promoter activity, and is linked to transformation of mammary epithelial cells.