Signal transducer and activator of transcription 3 (STAT3) is considered a negative regulator of inflammation, as inhibition of STAT3 signaling enhances antitumor immunity. However, STAT3 activation is a key oncogenic pathway in natural killer (NK)-lineage large granular lymphomas, and we recently reported enhanced proliferation and function of human NK cells activated with IL-21, which signals primarily through STAT3. These IL-21-expanded NK cells also have increased NKG2D expression, which led us to focus our investigation on whether STAT3 regulates NKG2D. In this study, we show that modulation of STAT3 phosphorylation with cytokines and small-molecule inhibitors correlates with NKG2D expression on human NK cells, leading to altered NK-cell degranulation. Moreover, NKG2D expression on murine NK cells having conditional STAT3 ablation is lower than on NK cells from wild-type mice, and human NK cells carrying dominant-negative STAT3 mutations have decreased baseline NKG2D expression and blunted responses to IL-10 and IL-21. Lastly, we show binding of STAT3 to a predicted STAT3 binding site upstream of the NKG2D gene, which is enhanced by IL-10 and IL-21 and decreased by STAT3 inhibition. Taken together, these data show that NKG2D expression in NK cells is regulated at the transcriptional level by STAT3, resulting in a functional NK cell defect in patients with STAT3 mutations.