Dopamine and cAMP-regulated phosphoprotein, Mr 32000 (DARPP-32), is frequently overexpressed in early stages of gastric cancers. We utilized in vitro assays, 3D gastric gland organoid cultures, mouse models, and human tissue samples to investigate the biological and molecular impact of DARPP-32 on activation of IGF1R and STAT3 signaling and gastric tumorigenesis. DARPP-32 enhanced phosphorylation of IGF1R (Y1135), a step that was critical for STAT3 phosphorylation at Y705, nuclear localization, and transcription activation. By using proximity ligation and co-immunoprecipitation assays, we found that IGF1R and DARPP-32 co-existed in the same protein complex. Binding of DARPP-32 to IGF1R promoted IGF1R phosphorylation with subsequent activation of downstream SRC and STAT3. Analysis of gastric tissues from the TFF1 knockout (KO) mouse model of gastric neoplasia, demonstrated phosphorylation of STAT3 in the early stages of gastric tumorigenesis. By crossing the TFF1 KO mice with DARPP-32 (DP) knockout (KO) mice, that have normal stomach, we obtained double knockout (TFF1 KO/DP KO). The gastric mucosa from the double KO mice did not show phosphorylation of IGF1R or STAT3. In addition, the TFF1 KO/DP KO mice had a significant delay in developing neoplastic gastric lesions. Analysis of human gastric cancer tissue microarrays, showed high levels of DARPP-32 and positive immunostaining for nuclear STAT3 in cancer tissues, as compared to non-cancer histologically normal tissues. In summary, the DARPP-32-IGF1R signaling axis plays a key role in regulating the STAT3 signaling, a critical step in gastric tumorigenesis.