Methods for treating autoimmune disease using one or more inhibitor of STAT3 are provided herein. Also disclosed are methods for diagnosing and monitoring autoimmune disease or the propensity to develop autoimmune disease in a subject. The present invention demonstrates that inhibition of STAT3 prevents development of autoimmune disease in vivo. Based on this finding, Stat3 inhibitors can be used to treat and/or diagnose autoimmune disease in a subject.