In this study, the potential role of Stat3 in UVB-induced skin carcinogenesis was examined using skin-specific gain and loss of function transgenic mice, that is, K5.Stat3C and K5Cre.Stat3(fl/fl) mice, respectively. The epidermis of Stat3-deficient mice was highly sensitive to UVB-induced apoptosis, whereas the epidermis of K5.Stat3C mice was more resistant to UVB-induced apoptosis. In particular, the status of Stat3 influenced the survival of ultraviolet-photoproduct cells, including those located in the hair follicles. K5.Stat3C mice exhibited significantly increased epidermal proliferation and hyperplasia in response to UVB irradiation, whereas Stat3-deficient mice showed reduced epidermal proliferation and hyperplasia. Expression of target genes regulated by Stat3, such as cyclin D1 and Bcl-x(L), was increased in epidermis of both control and UVB-irradiated K5.Stat3C mice, and downregulated in epidermis of both control and UVB-irradiated K5Cre.Stat3(fl/fl) mice. Following UVB irradiation, the formation of skin tumors in K5.Stat3C mice was accelerated and both the incidence and multiplicity of skin tumors were significantly greater than wild-type controls. In contrast, Stat3-deficient mice were resistant to UVB skin carcinogenesis. These results show that Stat3 plays an important role in the development of UVB-induced skin tumors through its effects on both survival and proliferation of keratinocytes during carcinogenesis.