Mutations in the neurofibromatosis 2 (NF2) gene with the resultant loss of expression of the NF2 tumor suppressor schwannomin are one of the most common causes of benign human brain tumors, including schwannomas and meningiomas. Previously we demonstrated that the hepatocyte growth factor-regulated tyrosine kinase substrate (HRS) strongly interacts with schwannomin. HRS is a powerful regulator of receptor tyrosine kinase trafficking to the degradation pathway and HRS also binds STAM. Both of these actions for HRS potentially inhibit STAT activation. Therefore, we hypothesized that schwannomin inhibits STAT activation through interaction with HRS. We now show that both schwannomin and HRS inhibit Stat3 activation and that schwannomin suppresses Stat3 activation mediated by IGF-I treatment in the human schwannoma cell line STS26T. We also find that schwannomin inhibits Stat3 and Stat5 phosphorylation in the rat schwannoma cell line RT4. Schwannomin with the pathogenic missense mutation 0538P falls to bind HRS and does not Inhibit Stat5 phosphorylation. These data are consistent with the hypothesis that schwannomin requires HRS interaction to be fully functionally active and to inhibit STAT activation.