Little is known about the regulation of signal transducer and activator of transcription (STAT) stability. Here the osmolarity-dependence of STAT3 stability, ubiquitination, Tyr(705) phosphorylation, STAT3 transactivation and gamma-fibrinogen (gamma-FBG) expression was studied in hepatoma cells. Hyper-osmolarity accelerated STAT3 degradation which was prevented by proteasome inhibitors. Hypo-osmolarity stabilized STAT3, most likely due to a decrease in STAT3 ubiquitination. Accordingly, STAT3 Tyr(705) phosphorylation, alpha(2)-macroglobulin promoter activity and gamma-FBG expression were osmosensitive. Modulation of STAT3 stability may contribute to a hydration dependence of acute phase protein expression.