Heterotrimeric G proteins are molecular switches that control signal transduction, and their dysregulation can promote oncogenesis. Somatic mutations in GNAS, GNAI2 and GNAQ genes induce oncogenesis by rendering Gα subunits constitutively activated. Recently the first somatic mutation, arginine(243) → histidine (R243H) in the GNAO1 (Gαo) gene was identified in breast carcinomas and shown to promote oncogenic transformation when introduced into cells. Here, we provide the molecular basis for the oncogenic properties of the Gαo R243H mutant. Using limited proteolysis assays, nucleotide-binding assays, and single-turnover and steady-state GTPase assays, we demonstrate that the oncogenic R234H mutation renders Gαo constitutively active by accelerating the rate of nucleotide exchange; however, this mutation does not affect Gαo's ability to become deactivated by GTPase-activating proteins (GAPs) or by its intrinsic GTPase activity. This mechanism differs from that of previously reported oncogenic mutations that impair GTPase activity and GAP sensitivity without affecting nucleotide exchange. The constitutively active Gαo R243H mutant also enhances Src-STAT3 signaling in NIH-3T3 cells, a pathway previously shown to be directly triggered by active Gαo proteins to promote cellular transformation. Based on structural analyses, we propose that the enhanced rate of nucleotide exchange in Gαo R243H results from loss of the highly conserved electrostatic interaction of R243 with E43, located in the in the P-loop that represents the binding site for the α- and β-phosphates of the nucleotide. We conclude that the novel R234H mutation imparts oncogenic properties to Gαo by accelerating nucleotide exchange and rendering it constitutively active, thereby enhancing signaling pathways, for example, src-STAT3, responsible for neoplastic transformation.