The expression of matrix metalloproteinase-2 (MMP-2) has been linked with tumor invasion, angiogenesis, and metastasis. However, the molecular basis for MMP-2 overexpression in tumor cells remains unclear. In this study, by using K-1735 melanoma system, we demonstrated that highly metastatic C4, M2, and X21 tumor cells express elevated MMP-2 mRNA and enzymatic activity, whereas poorly metastatic C10, C19, and C23 tumor cells express much lower levels. Moreover, a concomitant elevated Stat3 activity has been detected in these metastatic tumor cells that overexpress MMP-2. Transfection of constitutively activated Stat3 into poorly metastatic C23 tumor cells directly activated the MMP-2 promoter, whereas the expression of a dominant-negative Stat3 in highly metastatic C4 tumor cells inhibited the MMP-2 promoter. A high-affinity Stat3-binding element was identified in the MMP-2 promoter and Stat3 protein bound directly to the MMP-2 promoter. Blockade of activated Stat3 through expression of a dominant-negative Stat3 significantly suppressed MMP-2 expression in the metastatic tumor cells. Therefore, overexpression of MMP-2 in the metastatic melanoma cells can be attributed to elevated Stat3 activity, and Stat3 upregulates the transcription of MMP-2 through direct interaction with the MMP-2 promoter. Furthermore, blockade of activated Stat3 in highly metastatic C4 cells significantly suppressed the invasiveness of the tumor cells, inhibited tumor growth, and prevented metastasis in nude mice. Collectively, these studies suggest that Stat3 signaling directly regulates MMP-2 expression, tumor invasion, and metastasis, and that Stat3 activation might be a crucial event in the development of metastasis.