Signal Transducer and Activator of Transcription 3 (STAT3) is a transcription factor with many important functions in the biology of normal and transformed cells. Its regulation is highly complex as it is involved in signaling pathways in many different cell types and under a wide variety of conditions. Besides other functions, STAT3 is an important regulator of normal stem cells and cancer stem cells. p63 which is a member of the p53 protein family is also involved in these functions and is both physically and functionally connected with STAT3. This review summarizes STAT3 function and regulation, its role in stem cell and cancer stem cell properties and highlights recent reports about its relationship to p63.