Interleukin-11 (IL-11) expressed by endometrial stromal cells is crucial for normal pregnancy. IL-11 receptor (IL-11R) null mice are infertile due to abnormal development of the placenta. In these mice, the mesometrial decidual tissue, which is the site of trophoblast invasion, thins and disappears at mid-pregnancy. Degeneration of the decidua is accompanied by uncontrolled trophoblast invasion. In this report we show, using IL-11R null mice, that defect in IL-11 signaling in the decidua leads to severe down-regulation of ₂-macroglobulin (₂-MG), a metalloproteinase inhibitor crucial for limiting trophoblast invasion. We also present evidence, using uterine stromal cells that decidualize in culture, that IL-11 robustly stimulates the endogenous ₂-MG expression and enhances ₂-MG promoter activity. Serial 5'-deletion and internal deletion of the promoter reveal two important Stat binding sites. Mutation of either one of these motifs decreases IL-11 stimulation, whereas double mutation prevents IL-11 action. We also found that IL-11 activates Jak2 and induces rapid phosphorylation, nuclear translocation, and promoter binding activity of Stat3 in decidual cells while Jak1, Tyk2 and Stat5 activities are not affected. In addition, Jak2 inhibitor totally prevents ₂-MG expression in decidual cells. Taken together, results of this investigation provide, at least in part, an explanation for the over-invasiveness of the trophoblast in IL-11R null mice and reveal, for the first time, that IL-11 signals through the Jak2/Stat3 pathway in decidual cells to stimulate the expression of ₂-MG, a protease inhibitor essential for normal placentation in pregnancy.