Suppressor of cytokine signaling 3 (SOCS3) inhibits leukemia-inhibitory factor (LIF) signaling and acts as a negative regulator. Deletion of SOCS3 causes embryonic lethality because of placental failure, and genetic reduction of LIF or the LIF receptor (LIFR) in SOCS3-deficient mice rescues placental defects and embryonic lethality; this indicates that SOCS3 is an essential inhibitor of LIFR signaling. However, the downstream signaling molecule that acts as a link between the LIF receptor and SOCS3 has not been identified. In this study we explored the downstream signaling of LIFR. The administration of LIF to SOCS3-heterozygous pregnant mice promotes trophoblast giant cell differentiation and accelerates placental failure. SOCS3-deficient trophoblast stem cells show enhanced and prolonged Stat3 activation by LIF stimulation. Further, in the trophoblasts of SOCS3-deficient placenta and differentiating cells from the choriocarcinoma-derived cell line Rcho-1 cells, constitutive activation of Stat3 is observed. The forced expression of SOCS3, dominant-negative Stat3 and dominant-negative JAK1 in Rcho-1 cells significantly suppressed the trophoblast giant cell differentiation of these cells. In addition, the number of trophoblast giant cells is significantly reduced concomitant with an increased number of precursor trophoblasts in JAK1-deficient placentas. Finally, JAK1 deficiency rescues placental defects and embryonic lethality in SOCS3-deficient mice. These results indicate that the LIFR signaling is finely coordinated by JAK1, Stat3, and SOCS3 and regulates trophoblast giant cell differentiation. In addition, these data establish that LIFR-JAK1-Stat3-SOCS3 signaling is an essential pathway for the regulation of trophoblast giant cell differentiation.