Growth hormone and prolactin are important growth factors for pancreatic beta-cells. The effects exerted by these hormones on proliferation and on insulin synthesis and secretion in beta-cells are largely mediated through the Janus kinase (JAK)/signal transducer and activator of transcription (STAT) signaling pathway. Suppressors of cytokine signaling (SOCS) proteins are specific inhibitors of the JAK/STAT pathway acting through a negative-feedback loop. To investigate in vivo effects of SOCS-3 in growth hormone (GH)/prolactin signaling in beta-cells we generated transgenic mice with beta-cell-specific overexpression of SOCS-3. The relative beta-cell proliferation and volume in the mice were measured by morphometry. Beta-cell volume of transgenic female mice was reduced by over 30% compared with beta-cell volume in wild-type female mice. Stimulation of transgenic islets in vitro with GH showed a reduced tyrosine phosphorylation of STAT-5 when compared with wild-type islets. Transduction of primary islet cultures with adenoviruses expressing various SOCS proteins followed by stimulation with GH or glucagon-like peptide-1 (GLP-1) revealed that SOCS-3 inhibited GH- but not GLP-1-mediated islet cell proliferation, indicating that the decreased beta-cell volume observed in female transgenic mice could be caused by an inhibition of GH-induced beta-cell proliferation by SOCS-3. In spite of the reduced beta-cell volume the transgenic female mice exhibited enhanced glucose tolerance compared with wild-type littermates following an oral glucose-tolerance test. Together these data suggest that SOCS-3 modulates cytokine signaling in pancreatic beta-cells and therefore potentially could be a candidate target for development of new treatment strategies for diabetes.