Since seminal descriptions of signal transducer and activator of transcription 3 (STAT3) as a signal transducer and transcriptional regulator, which is most usually activated by phosphorylation of a specific tyrosine residue, a staggering wealth of research has delineated the key role of this transcription factor as a mediator of mammary gland postlactational regression (involution), and paradoxically, a pro-survival factor in breast cancer and some breast cancer cell lines. STAT3 is a critical regulator of lysosomal-mediated programmed cell death (LM-PCD) during mammary gland involution, where uptake of milk fat globules, and consequent high levels of free fatty acids, cause permeabilisation of lysosomal vesicle membranes, in turn leading to cathepsin protease leakage and cell death. A recent proteomic screen of STAT3-induced changes in lysosomal membrane protein components has highlighted wide-ranging effects of STAT3, which may coordinate LM-PCD via the stimulation of endocytosis, intracellular trafficking, and lysosome biogenesis. In parallel, STAT3 regulates the acute phase response during the first phase of involution, and it contributes to shaping the pro-tumourigenic ‘wound healing’ signature of the gland during the second phase of this process. STAT3 activation during involution is important across species, although some differences exist in the progression of involution in dairy cows. In breast cancer, a number of upstream regulators can lead to STAT3 activation and the effects of phosphorylation of STAT3 are equally wide-ranging. Recent studies have implicated microRNAs in some regulatory pathways. In this review, we will examine the multifaceted role of STAT3 in mammary gland involution and tumourigenesis, incorporating a review of these fundamental processes in tandem with a discussion of recent developments in this field.