BACKGROUND: The STAT (Signal Transducers and Activators of Transcription) transcription factor family mediates cellular responses to a wide range of cytokines. Activated STATs (particularly STAT3) are found in a range of cancers. Further, STAT3 has anti-apoptotic functions in a range of tumour cell lines. After observing a proteolytic cleavage in STAT3alpha close to a potential apoptotic caspase protease cleavage site we investigated whether STAT3alpha might be a caspase substrate. METHODS: STAT3alpha status was investigated in vitro in several cell systems:- HM-1 murine embryonic stem (ES) cells following various interventions; IOUD2 murine ES cells following induction to differentiate along neural or adipocyte lineages; and in a number of breast cancer cell lines. STAT3alpha status was also analysed in vivo in wild type murine mammary glands undergoing controlled, forced involution. RESULTS: Immunoblotting for STAT3alpha in HM-1 ES cell extracts detected amino and carboxy terminal species of approximately 48 kDa and 43 kDa respectively--which could be diminished dose-dependently by cell treatment with the nitric oxide (NO) donor drug sodium nitroprusside (SNP). UV irradiation of HM-1 ES cells triggered the STAT3alpha cleavage (close to a potential caspase protease cleavage site). Interestingly, the pan-caspase inhibitor z-Val-Ala-DL-Asp-fluoromethylketone (z-VAD-FMK) and the JAK2 tyrosine kinase inhibitor AG490 both inhibited cleavage dose-dependently, and cleavage was significantly lower in a heterozygous JAK2 knockout ES cell clone. STAT3alpha cleavage also occurred in vivo in normal murine mammary glands undergoing forced involution, coinciding with a pulse of phosphorylation of residue Y705 on full-length STAT3alpha. Cleavage also occurred during IOUD2 ES cell differentiation (most strikingly along the neural lineage) and in several human breast cancer cell lines, correlating strongly with Y705 phosphorylation. CONCLUSION: This study documents a proteolytic cleavage of STAT3alpha into 48 kDa amino and 43 kDa carboxyl terminal fragments in a range of cell types. STAT3alpha cleavage occurs close to a potential caspase site, and can be inhibited dose-dependently by SNP, AG490 and z-VAD-FMK. The cleavage seems to be caspase-dependent and requires the phosphorylation of STAT3alpha at the Y705 residue. This highly regulated STAT3alpha cleavage may play an important role in modulating STAT3 transcriptional activity.