Nuclear factor I-X3 (NFI-X3) is a newly identified splice variant of NFI-X that regulates expression of several astrocyte-specific markers, such as glial fibrillary acidic protein. Here, we identified a set of genes regulated by NFI-X3 that includes a gene encoding a secreted glycoprotein YKL-40. Although YKL-40 expression is up-regulated in glioblastoma multiforme, its regulation and functions in nontransformed cells of the central nervous system are widely unexplored. We find that expression of YKL-40 is activated during brain development and also differentiation of neural progenitors into astrocytes in vitro. Furthermore, YKL-40 is a migration factor for primary astrocytes, and its expression is controlled by both NFI-X3 and STAT3, which are known regulators of gliogenesis. Knockdown of NFI-X3 and STAT3 significantly reduced YKL-40 expression in astrocytes, whereas overexpression of NFI-X3 dramatically enhanced YKL-40 expression in glioma cells. Activation of STAT3 by oncostatin M induced YKL-40 expression in astrocytes, whereas expression of a dominant-negative STAT3 had a suppressive effect. Mechanistically, NFI-X3 and STAT3 form a complex that binds to weak regulatory elements in the YKL-40 promoter and activates transcription. We propose that NFI-X3 and STAT3 control the migration of differentiating astrocytes as well as migration and invasion of glioma cells via regulating YKL-40 expression.Astrocytes, the most abundant CNS cells, are critical for many functions of normal and pathological brains (1, 2). Generation and differentiation of astrocytes from neural progenitors is controlled by activation of the JAK-STAT3, BMP-SMAD, and Notch-HES pathways in vivo (3, 4) and promoted by cytokines of the IL-6 family that activate STAT3 in vitro (5, 6). In addition to these pathways, evolutionarily conserved NFI 3 transcription factors, consisting of NFI-A, -B, -C, and -X, regulate astrocyte differentiation (7,8). NFIs are expressed in overlapping patterns during embryogenesis, with high expression levels of NFI-A, -B, and -X found in the developing neocortex (9, 10). Consequently, Nfia, Nfib, and Nfix knock-out mice show severe brain anatomical defects, including agenesis of corpus callosum (9, 10), whereas NPs from Nfix knock-out mice show defects in proliferation and migration (9, 10). NFI-A and -B control gliogenesis in chick embryonic spinal cord (7), whereas NFI-X and -C regulate the expression of late astrocyte markers during the differentiation of human NPs in vitro (7,8). Expression of NFI-A is induced by Notch signaling in NP and leads to the demethylation of astrocyte-specific genes (11), as well as down-regulation of Notch signaling via repression of Notch effector Hes1 (12). Each of the NFI transcripts undergoes alternative splicing, generating as many as nine different NFI splice variants (13), likely possessing distinctive functions. We have recently characterized a novel human NFI-X3 splice variant, which is a potent activator of gene expression in astrocytes (14). NFI-X3 contains a unique transcri...