Maintenance of the haematopoietic and immune systems is largely controlled by the secretion of cytokines. Cytokine exposure initiates an intracellular signalling cascade that is driven by activation of a family of receptor-bound tyrosine kinases known as the JAKs (Janus Kinases). Under physiological conditions, JAK activation and signalling is tightly regulated, in particular by theSOCS (Suppressors of Cytokine Signalling) family of proteins. IL-6 is a multi-functional cytokine with important effects in both inflammation and haematopoiesis and SOCS3 is the primary inhibitor of IL-6 family signalling. Using structural and biochemical techniques, we have determined the molecular basis for the mechanism of action of SOCS3. Our data indicates that SOCS3 binds to an evolutionarily conserved sequence motif unique to JAK1, JAK2, and TYK2, but absent in JAK3 and then directly inhibits those three kinases by blocking their substrate binding sites. Surprisingly, we found that SOCS3 binds simultaneously to JAK and to a fragment of the IL-6 shared co-receptor, gp130, indicating that it is a JAK/gp130 dimer that is the true target for SOCS3 and explaining why it is specific for IL-6 family cytokines. Other cytokine receptors that also interact with SOCS3 are the Leptin receptor and G-CSFR and SOCS3 is a potent regulator of those cytokines as well. We present model that suggests how SOCS specificity and potency is generated and why it inhibits only a subset of cytokines.