Activation of the STAT family of transcription factors is regulated by cytokines and growth factors. STAT tyrosine and serine phosphorylation are linked to the transcriptional activation and function of STAT. We have previously described a unique pathway inducing keratinocyte proliferation, which is mediated by insulin stimulation and depends on protein kinase C delta (PKCdelta). In this study, we assessed STAT3 activation downstream of this pathway and characterized the role of PKCdelta activation in STAT3 tyrosine and serine phosphorylation and keratinocyte proliferation. Following insulin stimulation, STAT3 interacted with PKCdelta but not with any other PKC isoform expressed in skin. Activated forms of PKCdelta and STAT3 were essential for insulin-induced PKCdelta-STAT3 activation in keratinocyte proliferation. Abrogation of PKCdelta activity inhibited insulin-induced STAT3 phosphorylation, PKCdelta-STAT3 association and nuclear translocation. In addition, overexpression of STAT3 tyrosine mutant eliminated insulin-induced PKCdelta activation and keratinocyte proliferation. Finally, overexpression of a STAT3 serine mutant abrogated insulin-induced STAT3 serine phosphorylation and STAT3-induced keratinocyte proliferation, whereas STAT3 tyrosine phosphorylation was induced and nuclear localization remained intact. This study indicates that PKCdelta activation is a primary regulator of STAT3 serine phosphorylation and that PKCdelta is essential in directing insulin-induced signaling in keratinocyte proliferation.