Human iPSC technology has opened exciting opportunities for stem cell-based therapy. However, its wide adoption is precluded by several challenges including low reprogramming efficiency and potential for malignant transformation. Better understanding of the molecular mechanisms of the changes that cells undergo during reprograming is needed to improve iPSCs generation efficiency and to increase confidence for their clinical use safety. Here, we find that dominant negative mutations in STAT3 in patients with autosomal dominant hyper IgE syndrome (AD-HIES; Job's syndrome) result in greatly reduced reprograming efficiency of primary skin fibroblasts derived from skin biopsies. Analysis of normal skin fibroblasts revealed upregulation and phosphorylation of endogenous STAT3 and its binding to the NANOG promoter following transduction with OKSM factors. This coincided with upregulation of NANOG and appearance of cells expressing pluripotency markers. Upregulation of NANOG and number of pluripotent cells were greatly reduced throughout the reprograming process of AD-HIES fibroblasts that was restored by over-expression of functional STAT3. Human specific NANOG retrogene that is often expressed in human cancers, NANOGP8, was also induced during reprogramming, to very low but detectable levels, in a STAT3-dependent manner. Our study revealed the critical role of endogenous STAT3 in facilitating reprogramming of human somatic cells.