Previous work implicated activation of the signal transducer and activator of transcription (STAT)3 downstream of the epidermal growth factor receptor (EGFR) in the malignant phenotype of squamous carcinoma cells (SCC). Here, we show that EGFR-dependent STAT3 activation is restricted to malignant keratinocytes. Specifically, constitutive and epidermal growth factor-induced phosphorylation of STAT3 on Y705 was observed only in SCC but not in either immortalized (HaCaT) or normal keratinocyte strains. Furthermore, STAT3 activation as determined by DNA binding assays was restricted to SCC and dependent on EGFR activation. Forced expression of EGFR in immortalized keratinocytes (HaCaT cells) was associated with enhanced EGFR activation but not STAT3-Y705 phosphorylation. EGFR-dependent activation of mitogen-activated protein kinase (MAPK) kinase 1 negatively regulated STAT3-Y705 phosphorylation in normal and malignant keratinocytes. Together, these results underscore that EGFR activation is required but not sufficient for STAT3 activation to occur in malignant keratinocytes. They also highlight complex regulation of STAT3 phosphorylation through EGFR activation including negative regulation via the MAPK kinase/MAPK signaling pathway.