Signaling mechanisms that regulate astrocyte reactivity and scar formation after spinal cord injury (SCI) are not well defined. We used the Cre recombinase (Cre)-loxP system under regulation of the mouse glial fibrillary acidic protein (GFAP) promoter to conditionally delete the cytokine and growth factor signal transducer, signal transducer and activator of transcription 3 (STAT3), from astrocytes. After SCI in GFAP-Cre reporter mice, >99% of spinal cord cells that exhibited Cre activity as detected by reporter protein expression were GFAP-expressing astrocytes. Conditional deletion (or knock-out) of STAT3 (STAT3-CKO) from astrocytes in GFAP-Cre-loxP mice was confirmed in vivo and in vitro. In uninjured adult STAT3-CKO mice, astrocytes appeared morphologically similar to those in STAT3+/+ mice except for a partially reduced expression of GFAP. In STAT3+/+ mice, phosphorylated STAT3 (pSTAT3) was not detectable in astrocytes in uninjured spinal cord, and pSTAT3 was markedly upregulated after SCI in astrocytes and other cell types near the injury. Mice with STAT3-CKO from astrocytes exhibited attenuated upregulation of GFAP, failure of astrocyte hypertrophy, and pronounced disruption of astroglial scar formation after SCI. These changes were associated with increased spread of inflammation, increased lesion volume and partially attenuated motor recovery over the first 28 d after SCI. These findings indicate that STAT3 signaling is a critical regulator of certain aspects of reactive astrogliosis and provide additional evidence that scar-forming astrocytes restrict the spread of inflammatory cells after SCI.