In fulminant hepatic failure, survival is not possible without recovery of sufficient hepatocyte mass. Remarkably, only a few studies exist that provide insight into the mechanisms that control proliferation of residual hepatocytes after extensive hepatocyte loss. In this regard, the role of growth-regulatory factors, including pro-inflammatory cytokines such as interleukin-6 (IL-6), is not well understood. In the present study we show that in rats with critically low (10%) hepatocyte mass, whether with or without ongoing liver cell necrosis, inhibition of liver regeneration is associated with early and sustained increase in blood IL-6 levels. Under these conditions, the signal transducer and activator of transcription (Stat3) DNA binding activity was lowered at the time of G1/S cell-cycle transition. We further demonstrate that the protein inhibitor of activated Stat3 (PIAS3) and the suppressor of cytokine signaling (SOCS-1) were up-regulated early after induction of liver failure (6–12 h). In vitro, IL-6 induced PIAS3 expression in HGF stimulated rat hepatocytes. These findings suggest that after massive hepatocyte loss, an early and rapid rise in blood IL-6 levels may weaken the hepatic regenerative response through up-regulation of Stat3 inhibitors PIAS3 and SOCS-1.