Increased TGF-β1 and TGF-β1–dependent Collagen I production in intestinal mesenchymal cells result in fibrosis in patients with Montreal B2 fibrostenotic Crohn’s disease. Numerous cytokines, including IL-6, are produced by activated mesenchymal cells themselves and activate STAT3. The aim of the current study was to determine the mechanisms by which STAT-3 activation might result in intestinal fibrosis. Cytokine levels were measured by ELISA. STAT3 and suppressor of cytokine signaling 3 protein levels were measured by immunoblot, STAT3-TGFB1 DNA–binding activity by chromatin immunoprecipitation, and TGFB1 transcriptional activity by luciferase reporter assay. TGF-β1 (TGFB1), Collagen1α1, and connective tissue growth factor (CTGF) gene expression was measured by quantitative RT-PCR. The role of STAT3 activation was determined using STAT3 inhibitor, Stattic, and by transfection of STAT3 mutants. Autocrine production of cytokines was increased in muscle cells of B2 phenotype patients from strictures and normal intestine in the same patient and compared with other Crohn’s phenotypes, ulcerative colitis, and non-Crohn’s patients. A unique pattern of STAT3 phosphorylation emerged: high STAT3 (S727) and low STAT3 (Y705) in strictures and the opposite in unaffected intestine. TGFB1 transcriptional activity was regulated by phospho-STAT3 (S727) and was decreased by Stattic or dominant-negative STAT3 (S727A). TGF-β1, COL1A1, and CTGF expression was inhibited by Stattic or dominant-negative STAT3 (S727A). Treatment of normal muscle cells with IL-6 or expression of constitutively active STAT3 (S727E) phenocopied muscle cells from strictured intestine. Neutralization of autocrine IL-6 reversed STAT3 phosphorylation and normalized expression of TGF-β1 in strictured intestinal muscle. The ability of Stattic to improve development of fibrosis was confirmed in mice with 2, 4, 6-trinitrobenzenesulfonic acid–induced colitis. We observed a unique phospho-STAT3 (S727) response in patients with Montreal B2 Crohn’s disease, particularly in response to IL-6 leading to increased TGF-β1, collagen, and CTGF production in ileal strictures.