The constitutive activation of signal transducer and activator of transcription 3 (STAT3) participates in carcinogenesis through up-regulation of genes encoding apoptosis inhibitors and cell cycle regulators, such as Bcl-xL, cyclins D1 and D2, and c-myc. Suppressor of cytokine signaling 3 (SOCS3) is one of the negative regulators of cytokine signaling and is frequently silenced in diverse cancers. In this study, we explored whether restoration of SOCS3 by oncolytic adenoviral vectors could inhibit the constitutive activation of the Janus kinase/STAT pathway and suppress tumor growth. Our data showed that SOCS3 was down-expressed in all liver tumor cell lines. The incorporation of SOCS3 or SOCS3 fused with cell-penetrating peptides (cpp-SOCS3) did not alter adenoviral replication selectively in liver tumor cells. The infection of cells with adenovirus CN305 (AdCN305)-SOCS3 and AdCN305-cpp-SOCS3 resulted in dramatic cytotoxicity in liver tumor cells. However, no cytotoxic effect was observed in normal cells infected with these vectors. Infection of liver tumor cells with AdCN305-SOCS3 and AdCN305-cpp-SOCS3 resulted in nearly complete inhibition of STAT3 phosphorylation and down-regulation of cyclin D1 and Bcl-xL. Treatment of the established tumor by AdCN305-SOCS3 and AdCN305-cpp-SOCS3 caused significant suppression of tumor growth. The suppression of tumor growth was due to the inhibition of STAT3 phosphorylation and induction of tumor cell death. Conclusion: This study suggests that transfer of SOCS3 by an oncolytic adenovirus represents a potent approach for cancer therapy. Copyright © 2007 by the American Association for the Study of Liver Diseases.