Dual-specificity phosphatases (DUSPs) catalyze the dephosphorylation of tyrosine and serine/threonine residues in target proteins. Atypical DUSPs (aDUSPs) lack substrate-binding motifs, suggesting their potential to target a diverse array of substrates. This study demonstrated that DUSP21, an aDUSP, is induced by leukemia inhibitory factor (LIF) in HeLa cells and acts as a negative regulator of LIF-induced signal transducer and activator of transcription 3 (STAT3) activation. Overexpressed DUSP21 co-localized and interacted with STAT3 in HeLa cells. Recombinant DUSP21 directly dephosphorylated STAT3 in vitro. Additionally, DUSP21 overexpression modulated STAT3-dependent growth of Ba/F3-G133 cells. These findings indicate that LIF-induced DUSP21 exerts an inhibitory effect on the LIF/STAT3 signaling pathway, thereby functioning as a suppressor of STAT3-mediated transcriptional activity.