During respiratory cycles, airborne particles and pathogens are inhaled into the lung, which can cause cytokine production by respiratory macrophages and inflammatory responses. Secreted cytokines affect surfactant protein expression and homeostasis in the lung. In coculturing experiments in vitro, bronchoalveolar macrophages stimulated human surfactant protein B (hSP-B) gene transcription in primary alveolar type II epithelial cells in lipopolysaccharide-independent and -dependent ways. Neutralization by IL-6 antibody abolished lipopolysaccharide-dependent macrophage stimulation of hSP-B gene transcription. IL-6 treatment enhanced signal transducer and activator of transcription (Stat)3 phosphorylation at Y705 in alveolar type II epithelial cells and Clara cells in vivo. Biochemical analysis of functional domain swapping between Stat1 and Stat3 identified that the SH2 domain and the DNA binding domain are critical for Stat3 stimulation of hSP-B gene transcription. Glutathione-S-transferase pull-down study determined functional domains required for protein-protein interaction between Stat3 and retinoic acid receptor-alpha. Cotransfection of Stat3 and retinoic acid receptor-alpha into respiratory epithelial cells resulted in synergistic DNA binding and transcriptional activation on the hSP-B gene. To assess Stat3 physiological function, overexpression of a dominant negative Stat3 in respiratory epithelial cells in a doxycycline-controlled double transgenic mouse line caused pulmonary emphysema and increase of animal death during hyperoxia. Therefore, the IL-6/Stat3 signaling axis plays an important role in surfactant protein homeostasis and respiratory inflammation in the lung.