The transcription factor signal transducer and activator of transcription 3 (STAT3) participates in a wide variety of physiological processes and directs seemingly contradictory responses such as proliferation and apoptosis. To elucidate its role in the heart, we generated mice harboring a cardiomyocyte-restricted knockout of STAT3 using Cre/loxP-mediated recombination. STAT3-deficient mice developed reduced myocardial capillary density and increased interstitial fibrosis within the first 4 postnatal months, followed by dilated cardiomyopathy with impaired cardiac function and premature death. Conditioned medium from STAT3-deficient cardiomyocytes inhibited endothelial cell proliferation and increased fibroblast proliferation, suggesting the presence of paracrine factors attenuating angiogenesis and promoting fibrosis in vitro. STAT3-deficient mice showed enhanced susceptibility to myocardial ischemia/reperfusion injury and infarction with increased cardiac apoptosis, increased infarct sizes, and reduced cardiac function and survival. Our study establishes a novel role for STAT3 in controlling paracrine circuits in the heart essential for postnatal capillary vasculature maintenance, interstitial matrix deposition balance, and protection from ischemic injury and heart failure.