Dendritic cells (DCs) must achieve a critical balance between activation and tolerance, a process influenced by cytokines and growth factors. IL-10, which transduces signals through Stat3, has emerged as one important negative regulator of DC activation. To directly examine the role Stat3 plays in regulating DC activity, the Stat3 gene was targeted for deletion with a CD11c-cre transgene. Stat3 CKO mice developed cervical lymphadenopathy as well as a mild ileocolitis that persisted throughout life and was associated with impaired weight gain. Consistent with this, Stat3-deficient DCs demonstrated enhanced immune activity, including increased cytokine production, Ag-dependent T-cell activation and resistance to IL-10–mediated suppression. These results reveal a cell-intrinsic negative regulatory role of Stat3 in DCs and link increased DC activation with perturbed immune homeostasis and chronic mucosal inflammation.