Endothelial cells (ECs) are believed to be an important component in the protection from lipopolysaccharide (LPS)-induced endotoxic shock. However, the cellular and molecular mechanism is not well defined. Here, we report that signal transducer and activator of transcription (STAT) 3 is an essential regulator of the antiinflammatory function of ECs in systemic immunity. Because STAT3 deficiency results in early embryonic lethality, we have generated mice with a conditional STAT3 deletion in endothelium (STAT3E-/-). STAT3E-/- mice are healthy and fertile, and isolated ECs initiate normal tube formation in vitro. Conditional endothelial but not organ-specific (i.e., hepatocyte or cardiomyocyte) STAT3 knockout mice show an increased susceptibility to lethality after LPS challenge. The LPS response in STAT3E-/- mice shows exaggerated inflammation and leukocyte infiltration in multiple organs combined with elevated activity of serum alanine aminotransferase and aspartate aminotransferase, indicating organ damage. Concomitantly, proinflammatory cytokines are produced at an exaggerated level and for a prolonged period. This defect cannot be explained by lack of antiinflammatory cytokines, such as interleukin 10 and transforming growth factor beta. Instead, we have shown that a soluble activity derived from endothelia and dependent on STAT3 is critical for suppression of interferon gamma. These data define STAT3 signaling within endothelia as a critical antiinflammatory mediator and provide new insight to the protective function of ECs in inflammation.