In cultured vascular smooth muscle cells (SMCs), STAT3 mediates proliferation signal by directly activating transcription of early growth response genes. Recently, we have found that balloon injury transiently induces JAK2 and STAT3 expressions and activations with a peak at day 7 in rat carotid artery. However, the specific role of STAT3 in neointima formation remains unknown. Adenoviral vector encoding a dominant negative STAT3 (AxCAdnSTAT3) or beta-galactosidase (control) was overexpressed in a balloon-injured artery to inhibit endogenous STAT3 activation selectively. In controls, neointima became evident after day 4, and reached a maximum at day 14. The number of bromodeoxyuridine (BrdU)-positive proliferating or TUNEL-positive apoptotic neointimal SMCs peaked at day 7, decreasing to lower levels by day 14. AxCAdnSTAT3 not only abrogated STAT3 phosphorylation but also decreased BrdU labeling index by 60% and increased TUNEL index by 35% at day 7 versus controls, resulting in the 40% reduction in the intima/media area ratio at day 14. At day 7, in controls, vascular injury upregulated antiapoptotic mediator Mcl-i and Bcl-xL expression by 8-fold to 5-fold, respectively, versus sham, whereas proapoptotic Bax slightly increased by 1.5-fold versus sham. AxCAdnSTAT3 reversed the upregulated Mcl-1 and Bcl-xL levels by 70% and 37%,respectively, while having no affect on Bax expression. In conclusion, the STAT3-mediated pathway plays an important role in neointima formation through enhanced vascular SMC accumulation by promoting cell proliferation and survival.