Sepsis is an infection‐induced syndrome with systemic inflammatory response leading to multiorgan failure and occasionally death. During this process, signal transducer and activator of transcription 3 (STAT3) is activated in the liver, but the significance of this molecule has not been established. We generated hepatocyte‐specific STAT3‐deficient mice (L‐STAT3 KO) and examined the susceptibility of these mice to cecal ligation and puncture–induced peritonitis, a well‐established septic model. L‐STAT3 KO mice showed significantly higher mortality and produced lesser amounts of various acute phase proteins than control littermates. Although blood bacterial infection did not differ between L‐STAT3 KO mice and control mice, the former showed deterioration of the systemic inflammatory response as evidenced by a significant increase in various cytokines such as tumor necrosis factor α, IFN‐γ, IL‐6, IL‐10, monocyte chemoattractant protein 1, and macrophage inflammatory protein 1β. A similar hyperinflammatory response was observed in another septic model caused by lipopolysaccharide (LPS) injection. In vitro analysis revealed that soluble substances derived from hepatocytes and dependent on STAT3 were critical for suppression of cytokine production from LPS‐stimulated macrophage and splenocytes. Conclusion: STAT3 activation in hepatocytes can attenuate a systemic hyperinflammatory response and lethality in sepsis, in part by suppressing immune cell overactivation, implying a critical role of hepatocyte STAT3 signaling in maintaining host homeostasis. (HEPATOLOGY 2007.)