STAT-family transcription factors are classically viewed as transducing cytokine- and growth factor-activated signals from the plasma membrane to the cell nucleus for the purpose of activating transcription..We report live-cell imaging studies of fluorescently-labeled STAT3 expressed in Hep3B hepatocytes which reveal interleukin-6 (IL-6)-activated targeting of STAT3 and PY-STAT3 to relatively long-lived sequestering endosomes in the cytoplasm. This targeting was rapid but transient, required phosphorylation and integrity of Tyr-705 in STAT3 and was blocked by nocodazole, geldanamycin and indirubin E804 and by overexpression of wild-type caveolin-1. Strikingly, overexpression of the dominant-negative (DN) mutant K44A of the GTPase dynamin II led to marked constitutive accumulation of STAT3 in the endocytic compartment with depletion of the STAT3 nuclear pool. Subsets of the native and K44A-generated STAT3- and PY-STAT3 sequestering endosomes colocalized with MyD88, an adapter protein which integrates pathways of Toll-like receptor (TLR) and interleukin-1 (IL-1) transcriptional signaling and for stabilization of mRNAs. These data provide direct evidence for the cytokine-induced signal transduction by STAT3 from the plasma membrane to a cytoplasmic membrane destination for yet to be elucidated function(s) in the cytoplasm including prolongation of signaling and/or cross-talk.