In cancer, persistent antigens drive CD8+ T cell differentiation into exhausted progenitor (Texprog) and terminally exhausted (Texterm) cells. However, how the extrinsic and intrinsic regulatory mechanisms cooperate during this process still remains not well understood. Here, we found that STAT3 signaling plays essential roles in promoting intratumor Texterm cell development by enhancing their effector functions and survival, which results in better tumor control. In tumor microenvironments, STAT3 is predominantly activated by IL-10 and IL-21, but not IL-6. Besides, STAT3 also plays critical roles in the development and function of terminally differentiated effector CD8+ T cells in acute infection. Mechanistically, STAT3 transcriptionally promotes the expression of effector function-related genes, while it suppresses those expressed by the progenitor Tex subset. Moreover, STAT3 functions in collaboration with BATF and IRF4 to mediate chromatin activation at the effector gene loci. Thus, we have elucidated the roles of STAT3 signaling in terminally differentiated CD8+ T cell development, especially in cancer, which benefits the development of more effective immunotherapies against tumors.