Spermatogenesis relies on coordinated differentiation of stem and progenitor spermatogonia, and the transcription factor STAT3 is essential for this process in mammals. Here we studied the THY1 spermatogonial population in mouse testes, which contains spermatogonial stem cells (SSC) and non-stem cell progenitor spermatogonia, to further define the downstream mechanism regulating differentiation. Transcript abundance for the bHLH transcription factor Neurog3 was found to be significantly reduced upon transient inhibition of STAT3 signaling in these cells and exposure to GDNF, a key growth factor regulating self-renewal of SSCs, suppressed activation of STAT3 and in accordance Neurog3 gene expression. Moreover, STAT3 was found to bind the distal Neurog3 promoter/enhancer region in THY1 spermatogonia and regulate transcription. Transient inhibition of Neurog3 expression in cultures of proliferating THY1 spermatogonia increased stem cell content after several self-renewal cycles without effecting overall proliferation of the cells, indicating impaired differentiation of SSCs to produce progenitor spermatogonia. Furthermore, cultured THY1 spermatogonia with induced deficiency of Neurog3 were found to be incapable of differentiation in vivo following transplantation into testes of recipient mice. Collectively, these results establish a mechanism by which activation of STAT3 regulates the expression of NEUROG3 to subsequently drive differentiation of SSC and progenitor spermatogonia in the mammalian germline.