The CCAAT enhancer-binding protein (C/EBP) family of transcription factors is implicated in the regulation of cell proliferation and differentiation in a variety of tissues. C/EBPdelta is involved in regulating G(0) growth arrest and apoptosis of mouse mammary epithelial cells. This study shows that activation of signal transducer and activator of transcription 3 (Stat3), but not activation of Stat1 or Stat5, occurs concurrently with G(0) growth arrest of HC11 mouse mammary epithelial cells, but not NIH 3T3 fibroblasts. Promoter analysis demonstrates that the C/EBPdelta promoter fragment involved in transcriptional activation during G(0) growth arrest contains a Stat3 binding site and that mutation of this site eliminates the G(0) growth arrest inducibility of the C/EBPdelta promoter. Overexpression of Stat3 increases C/EBPdelta promoter activity during G(0) growth arrest of HC11 cells, whereas dominant negative Stat3 decreases C/EBPdelta promoter activity under the same conditions. Neither Stat3 overexpression nor dominant negative Stat3 expression influences C/EBPdelta promoter activity in growing HC11 cells or G(0) growth-arrested NIH3T3 cells, demonstrating that the effect is specific to G(0) growth arrest of mammary epithelial cells. Band shift assays and antibody interference assays demonstrate specific binding of Stat3 to the acute phase response element in the C/EBPdelta promoter in G(0) growth-arrested HC11 cell extracts and 24 h involuting mouse mammary gland extracts. These data indicate that Stat3 activates C/EBPdelta transcription in G(0) growth-arrested mouse mammary epithelial cells and binds to the C/EBPdelta promoter during involution. An autocrine mechanism of Stat3 activation is proposed.