We have previously characterized mouse CMV (MCMV)–encoded immune-evasive IFN signaling inhibition and identified the viral protein pM27 as inducer of proteasomal degradation of STAT2. Extending our analysis to STAT1 and STAT3, we found that MCMV infection neither destabilizes STAT1 protein nor prevents STAT1 tyrosine Y701 phosphorylation, nuclear translocation, or the capability to bind g-activated sequence DNA-enhancer elements. Unexpectedly, the analysis of STAT3 revealed an induction of STAT3 Y705 phosphorylation by MCMV. In parallel, we found decreasing STAT3 protein amounts upon MCMV infection, although STAT3 expression normally is positive autoregulative. STAT3 phosphorylation depended on the duration of MCMV infection, the infectious dose, and MCMV gene expression but was independent of IFNAR1, IL-10, IL-6, and JAK2. Although STAT3 phosphorylation did not require MCMV immediate early 1, pM27, and late gene expression, it was restricted to MCMV- infected cells and not transmitted to bystander cells. Despite intact STAT1 Y701 phosphorylation, IFN-g–induced target gene transcription (e.g., IRF1 and suppressor of cytokine signaling [SOCS] 1) was strongly impaired. Likewise, the induction of STAT3 target genes (e.g., SOCS3) by IL-6 was also abolished, indicating that MCMV antagonizes STAT1 and STAT3 despite the occur- rence of tyrosine phosphorylation. Consistent with the lack of SOCS1 induction, STAT1 phosphorylation was prolonged upon IFN-g treatment. We conclude that the inhibition of canonical STAT1 and STAT3 target gene expression abrogates their intrinsic negative feedback loops, leading to accumulation of phospho–tyrosine-STAT3 and prolonged STAT1 phosphorylation. These findings challenge the generalization of tyrosine-phosphorylated STATs necessarily being transcriptional active and document antagonistic effects of MCMV on STAT1/3-dependent target gene expression.