Tubule formation in vitro using Madin-Darby canine kidney (MDCK) epithelial cells consists mainly of two processes. First, the cells undergo a partial epithelial-mesenchymal transition (pEMT), losing polarity and migrating. Second, the cells redifferentiate, forming cords and then tubules with continuous lumens. We have shown previously that extracellular signal-regulated kinase activation is required for pEMT. However, the mechanism of how the pEMT phase is turned off and the redifferentiation phase is initiated is largely unknown. To address the central question of the sequential control of these two phases, we used MDCK cells grown as cysts and treated with hepatocyte growth factor to model tubulogenesis. We show that signal transducer and activator of transcription (STAT)1 controls the sequential progression from the pEMT phase to the redifferentiation phase. Loss of STAT1 prevents redifferentiation. Constitutively active STAT1 allows redifferentiation to occur even when cells are otherwise prevented from progressing beyond the pEMT phase by exogenous activation of Raf. Moreover, tyrosine phosphorylation defective STAT1 partially restored cord formation in such cells, suggesting that STAT1 functions in part as nonnuclear protein mediating signal transduction in this process. Constitutively active or inactive forms of STAT1 did not promote lumen maturation, suggesting this requires a distinct signal.