Suppressor of cytokine signaling 3 (SOCS3), as a key regulator of cytokine signaling, has the potential to modulate numerous cellular processes. Its involvement in inflammatory disease is well established, and there is increasing evidence for a role in breast cancer as a regulator of signal transducers and activators of transcription (STATs). Here we show that over-expression of SOCS3 markedly supresses STAT3 expression, and abrogates STAT5 phosphorylation, resulting in decreased cell proliferation in T47D breast cancer cells, and decreased proliferation and anchorage-independent growth in MCF7 cells. Using T47D cells, we elucidated the signaling pathways and transcription factors involved in SOCS3 expression in response to prolactin, a key mammotropic hormone. Quantitative real time PCR was used to examine SOCS3 mRNA expression, IP/WB was used to examine STAT phosphorylation, luciferase reporter assays, chromatin immunoprecipitation (ChIP) and gel shift assays allowed evaluation of cis-elements and trans-factors regulating SOCS3 expression. We demonstrate that prolactin-induced SOCS3 expression is STAT-dependant, predominantly involving STAT5, although STAT1 is also associated with the promoter. In addition, prolactin-induced SOCS3 promoter activation requires PKA-stimulated Sp1 binding to the GC-rich region of the promoter. Finally, we show that PRL-induced SOCS3 expression can be potentiated by co-treatment with PGE(2). This study demonstrates that SOCS3 acts as an anti-proliferative agent in breast cancer cells, and highlights the complexity of SOCS3 regulation and crosstalk.