Activation of the transcription factor STAT3 is thought to potently promote oncogenesis in a variety of tissues, leading to intense efforts to develop STAT3 inhibitors for many tumors, including the highly malignant brain tumor glioblastoma. However, the function of STAT3 in glioblastoma pathogenesis has remained unknown. Here, we report that STAT3 plays a pro-oncogenic or tumor-suppressive role depending on the mutational profile of the tumor. Deficiency of the tumor suppressor PTEN triggers a cascade that inhibits STAT3 signaling in murine astrocytes and human glioblastoma tumors. Specifically, we forge a direct link between the PTEN-Akt-FOXO axis and the leukemia inhibitory factor receptor β (LIFRβ)-STAT3 signaling pathway. Accordingly, PTEN knockdown induces efficient malignant transformation of astrocytes upon knockout of the STAT3 gene. Remarkably, in contrast to the tumor-suppressive function of STAT3 in the PTEN pathway, STAT3 forms a complex with the oncoprotein epidermal growth factor receptor type III variant (EGFRvIII) in the nucleus and thereby mediates EGFRvIII-induced glial transformation. These findings indicate that STAT3 plays opposing roles in glial transformation depending on the genetic background of the tumor, providing the rationale for tailored therapeutic intervention in glioblastoma.