Signal transducer and activator of transcription 3 (Stat3) is one of a family of cytoplasmic proteins that participate in normal cellular responses to cytokines and growth factors as transcription factors. Stat3 modulates various physiological functions including cell survival, cell-cycle regulation, and angiogenesis through regulation of gene expression, and its constitutive activation is associated with a number of human epithelial cancers. Recent studies with skin-specific gain and loss of Stat3 function transgenic mice have shown that Stat3 plays critical roles in skin carcinogenesis. Multistage skin carcinogenesis bioassays performed with these transgenic mice clearly demonstrate that Stat3 is required for both tumor initiation and promotion through regulation of genes involved in survival and proliferation, respectively. Stat3 also plays a role in malignant progression of skin tumors by regulating genes that are involved in angiogenesis and invasion. Further studies have revealed that Stat3 plays a critical role in epidermal cell proliferation and survival following exposure to ultraviolet B (UVB) irradiation. In addition, Stat3 is constitutively active in UVB-induced skin tumors from both mice and humans. Collectively, these studies suggest that Stat3 may be a potential target for both the prevention and treatment of human epithelial cancers including skin cancer.