The initiation stage of mouse skin carcinogenesis involves the induction of mutations in keratinocyte stem cells (KSC), which confers a selective growth advantage allowing clonal expansion during tumor promotion. Targeted disruption of signal transducer and activator of transcription 3 (Stat3) in bulge region KSCs was achieved by treating K15.CrePR1 x Stat3(fl/fl) mice with RU486. Deletion of Stat3 prior to skin tumor initiation with 7,12-dimethylbenz(a)anthracene significantly increased the number of apoptotic KSCs and decreased the frequency of Ha-ras codon 61 A(182)-->T transversion mutations in this cell population compared with wild-type littermates. Targeted disruption of Stat3 in bulge region KSCs at the time of initiation also dramatically reduced the number of skin tumors (by approximately 80%) produced following promotion with the phorbol ester 12-O-tetradecanoylphorbol-13-acetate. These results show that Stat3 is required for the survival of bulge region KSCs during tumor initiation. Furthermore, these data provide direct evidence that bulge region KSCs are the primary targets for the initiation of skin tumors in this model system.