The signal transducers and activators of transcription (STAT) family of transcription factors regulates a variety of biological functions including cellular proliferation, transformation, apoptosis, and differentiation. We have previously determined that PDGF activates the STAT pathway in human airway smooth muscle cells (HASMC) and that the Jak and Src kinases are required for both PDGF-induced STAT activation and HASMC proliferation. As increased airway smooth muscle (ASM) volume is associated with airflow obstruction and disease severity in patients with asthma, it is important to elucidate the cellular and molecular pathways that regulate ASM accumulation. In this paper, we investigated the requirement of STAT3 for PDGF-induced HASMC proliferation. We demonstrate that knockdown of STAT3 expression in HASMC resulted in a significant decrease in mitogen-induced cellular proliferation. Additionally, PDGF-induced activation of STAT3 required the small GTP-binding protein Rac1, and Rac1 was also required for PDGF-induced HASMC proliferation. Furthermore, PDGF treatment induced STAT3 and Rac1 to physically associate and translocate to the nucleus, identifying one mechanism by which STAT3 is regulated in response to PDGF in HASMC. Finally, we determined that STAT3 expression is required for PDGF-mediated regulation of cell cycle targets cyclin D3 and p27. These data define a novel mitogenic signaling pathway in airway smooth muscle cells leading from PDGF to Rac1 and STAT3 and subsequent cell cycle gene regulation. Thus, targeting STAT3 may prove to be a novel therapeutic approach for patients with severe asthma and significant airway wall remodeling, as manifested by ASM accumulation.