Signal transducer and activator of transcription 3 (STAT3) is a latent cytoplasmic transcription factor. It is activated by cytokines, including interleukin-6 (IL-6) through phosphorylation at Tyr705 (pY705), which is required for its dimerization and nuclear translocation. However, the role of Ser727 phosphorylation, occurring during activation, remains poorly understood. Using a combination of HepG2-stat3-knockdown cells reconstituted with various STAT3 mutants and protein kinase inhibitors, we showed that phospho-S727 has an intrinsic mechanism for shortening the duration of STAT3 activity, in turn shortening the duration of socs3 mRNA expression. Both STAT3WT and STAT3Ser727Asp (S727D) but not STAT3Ser727Ala (S727A) showed rapid dephosphorylation of pY705 after the inhibition of tyrosine kinases. We found that the nuclear TC45 phosphatase is most likely responsible for the phospho-S727-dependent pY705 dephosphorylation because TC45 knockdown caused prolonged pY705 with sustained socs3 mRNA expression in STAT3WT but not in STAT3S727A, and overexpressed TC45 caused rapid dephosphorylation of pY705 in STAT3WT but not in STAT3S727A. We further showed that phospho-S727 did not affect the interaction of TC45 with STAT3, and that a reported methylation at K140 of STAT3 occurring after phospho-S727 was not involved in the pY705 regulation. These findings indicate that phospho-Ser727 determines the duration of STAT3 activity largely through TC45.