Protein kinase C (PKC) represents a large family of phosphatidylserine (PS)-dependent serine/threonine protein kinases. At least six PKC isoforms (alpha, delta, epsilon, eta, micro, and zeta) are expressed in epidermis. PKC is a major intracellular receptor for 12-O-tetradecanoylphorbol-13-acetate (TPA) and is also activated by a variety of stress factors including ultraviolet radiation (UVR). PKC isozymes (alpha, delta, epsilon, and eta), exhibit specificities to the development of skin cancer. PKCepsilon, a calcium-insensitive PKC isoform, is linked to the development of squamous cell carcinoma (SCC) elicited either by the 7,12-Dimethylbenzanthracene (DMBA)-TPA protocol or by repeated exposures to UVR. PKCepsilon overexpressing transgenic mice, when treated either with TPA or exposed to UVR, elicit similar responses such as inhibition of apoptosis, promotion of cell survival, and development of SCC. PKCepsilon overexpression increases Stat3 activation after either TPA treatment or UVR exposure. Both PKCepsilon and signal transducers and activators of transcription-3 (Stat3) are implicated in the development of SCC. However, the link between PKCepsilon and Stat3 remains elusive. We found that PKCepsilon interacts with Stat3. PKCepsilon interaction with Stat3 was dependent upon UVR treatment. In reciprocal immunoprecipitation/blotting experiments, Stat3 coimmunoprecipitated with PKCepsilon. Colocalization of PKCepsilon with Stat3 was confirmed by double immunofluorescence staining. PKCepsilon interaction with Stat3 was PKCepsilon isoform specific and was not observed with other protein kinases. As observed in vitro with immunocomplex kinase assay with immunopurified PKCepsilon and Stat3, PKCepsilon phosphorylated Stat3 at the serine 727 residue. PKCepsilon depletion prevented Stat3Ser727 phosphorylation, Stat3 DNA binding, and transcriptional activity. The results presented indicate that PKCepsilon mediates Stat3 activation.