The nuclear factor of activated T cells (NFAT) family proteins are transcription factors that regulate the expression of proinflammatory cytokines and other genes during the immune response. Although the NFAT proteins have been extensively investigated in the immune system, their role in cancer progression remains controversial. Here, we report that NFAT3 is highly expressed in various skin cancer cell lines and tumor tissues. Knockdown of endogenous NFAT3 expression by short hairpin RNA (shRNA) significantly inhibited tumor cell proliferation, colony formation and anchorage-independent cell growth. Furthermore, results of the mammalian two-hybrid assay showed that cyclin-dependent kinase 3 (CDK3) directly interacted with NFAT3 and phosphorylated NFAT3 at serine 259 (Ser259), which enhanced the transactivation and transcriptional activity of NFAT3. The phosphorylation site of NFAT3 was critical for epidermal growth factor (EGF)-stimulated cell transformation of the HaCaT immortalized skin cell line and mutation of NFAT3 at Ser259 led to a reduction of colony formation in soft agar. We also found that overexpressing wildtype NFAT3, but not mutant NFAT3-S259A, promoted A431 xenograft tumor growth. Importantly, we showed that CDK3, NFAT3 and phosphorylated NFAT3-Ser259 were highly expressed in skin cancer compared with normal skin tissues. These results provided evidence supporting the oncogenic potential of NFAT3 and suggested that CDK3-mediated phosphorylation of NFAT3 has an important role in skin tumorigenesis.