An important feature of the adaptive immune response is its remarkable capacity to regulate the duration of inflammatory responses, and effector T cells have been shown to limit excessive immune responses by producing anti-inflammatory cytokines such as IL-10 and IL-27. However, how anti-inflammatory cytokines mediate their suppressive activities is not well understood. In this study, we show that STAT3 contributes to mechanisms that control the duration of T cell proliferation by regulating the subcellular location of FoxO1 and FoxO3a, two Class O Forkhead transcription factors that mediate lymphocyte quiescence and inhibit T cell activation. We show that active FoxO1 and FoxO3a reside exclusively in the nucleus of naïve T cells whereas inactive pFoxO1 and pFoxO3a were most abundant in activated T cells and sequestered in their cytoplasm in association with unphosphorylated STAT3 (U-STAT3) and 14-3-3. We further show that FoxO1/FoxO3a rapidly relocalized into the nucleus in response to pSTAT3 activation by IL-6 or IL-10, and the accumulation of FoxO1/FoxO3a in their nuclei coincided with increased expression of p27(Kip1) and p21(WAF1). STAT3 inhibitors completely abrogated cytokine-induced translocation of FoxO1/FoxO3a into the nucleus. In naïve or resting STAT3-deficient T cells, expression of pFoxO1/pFoxO3a was predominantly in the cytoplasm and correlated with defects in p27(Kip1) and p21(WAF1) expression, suggesting requirement of STAT3 for importation or retention of FoxO in the nucleus and attenuation of lymphocyte proliferation. Taken together, these results suggest that U-STAT3 collaborates with 14-3-3 to sequester pFoxO1/pFoxO3a in cytoplasm and thus prolong T cell activation, whereas pSTAT3 activation by anti-inflammatory cytokines would curtail the duration of TCR activation and re-establish lymphocyte quiescence by inducing nuclear localization of FoxO1/FoxO3a and FoxO-mediated expression of growth-inhibitory proteins.