Retinal pericytes are mural cells surrounding capillaries to maintain the integrity of blood-retina barrier and regulate vascular behaviors. Pericyte loss has been considered as the hallmark of diabetic retinopathy (DR), which is a major complication of diabetes and the leading cause of blindness in adults. However, the precise function of pericytes in regulating the retinal microenvironment and the underlying mechanism remains largely unknown. In this study, we observed a secretory phenotype of pericytes with elevated inflammatory cytokines in response to Interleukin-1β (IL-1β), a canonical inflammatory cytokine which significantly increases during the initial stages of diabetic retinopathy. This phenotype is also accompanied by reduced expression of adherent junction proteins and contractile proteins. Paracrine cytokines derived from pericytes further induce the chemotaxis of microglia cells and trigger detrimental changes in endothelial cells, including reduced expression of tight junction protein Occludin and increased apoptosis. Mechanically, the secretion potential in pericytes is partially mediated by Hes1/STAT3 signaling pathway. Moreover, co-injection of stattic, an inhibitor targeting STAT3 activation, could effectively attenuate IL-1β-induced retinal inflammation and microglial activation in retina tissues. Collectively, these findings demonstrate the potential of retinal pericytes as an initial inflammatory sensor prior to their anatomical pathological loss, via undergoing phenotypic changes and secreting paracrine factors to amplify local inflammation and damage endothelial cells in vitro. Furthermore, inhibition of STAT3 activation by inhibitors significantly ameliorates IL-1β-induced retinal inflammation, suggesting STAT3 in retinal pericytes as a promising target for alleviating DR and other IL-1β-induced ocular diseases.