The overall jobless rate rose from an upwardly revised 12.1 percent the month before and returned to a peak reached in May.
It was above the average forecast in a Reuters survey of analysts which pointed to 12.0 percent.
Unemployment had followed an upward trend since early 2011 as Italy has languished in its longest post-war recession.
Youth unemployment, measuring job-seekers between 15 and 24 years old, climbed in August to 40.1 percent from 39.7 percent to hit its highest level since ISTAT began recording the data in 1977.
Prospects for recovery in the euro zone's third largest economy are being threatened by renewed political chaos.
Prime Minister Enrico Letta battling to stay in office after centre-right leader Silvio Berlusconi withdrew his party's five ministers from the government.
The employment rate - showing the proportion of Italians in work as a proportion of the population - was stable in August for the fifth month in a row at 55.8 percent.
Analysts say the biggest challenge for Italy is to increase its chronically low rates of employment and participation in the labour market, which are among the lowest in the industrialized world, especially among women, the young and the elderly.
In August, there were 347,000 less people in work compared with the same month of last year.