We found IL-6-STAT3 pathway suppresses MHC class II (MHCII) expression on dendritic cells (DCs) and attenuates T cell activation. Here, we showed that IL-6-STAT3 signaling reduced intracellular MHCII alphabeta dimmer, Ii, and H2-DM levels in DCs. IL-6-mediated STAT3 activation decreased cystatin C level, an endogenous inhibitor of cathepsins, and enhanced cathepsin activities. Importantly, cathepsin S inhibitors blocked reduction of MHCII alphabeta dimer, Ii, and H2-DM in the IL-6-treated DCs. Overexpression of cystatin C suppressed IL-6-STAT3-mediated increase of cathepsin S activity and reduction of MHCII alphabeta dimer, Ii, and H2-DM levels in DCs. Cathepsin S overexpression in DCs decreased intracellular MHCII alphabeta dimer, Ii, and H2-DM levels, LPS-mediated surface expression of MHCII and suppressed CD4(+) T cell activation. IL-6-gp130-STAT3 signaling in vivo decreased cystatin C expression and MHCII alphabeta dimer level in DCs. Thus, IL-6-STAT3-mediated increase of cathepsin S activity reduces the MHCII alphabeta dimer, Ii, and H2-DM levels in DCs, and suppresses CD4(+) T cell-mediated immune responses.