Given the role of constitutively active Signal Transducer and Activator of Transcription (Stat) 3 in human tumors, Stat3 inhibitors would be useful as novel therapeutics and as tools for probing Stat3-mediated tumor processes. We herein report that a 28-mer peptide, SPI, derived from the Stat3 SH2 domain, replicates Stat3 biochemical properties. Studies show SPI and Stat3 (or Stat3 SH2 domain) bind with similar affinities to known Stat3-binding phosphotyrosine (pY) peptide motifs, including those of the epidermal growth factor receptor (EGFR) and the high-affinity, IL-6R/gp130-derived pY-peptide, GpYLPQTV-NH 2 . Consequently, SPI functions as a potent and selective inhibitor of Stat3 SH2 domain:pTyr interactions and disrupts the binding of Stat3 to the IL-6R/gp130 peptide, GpYLPQTV-NH 2 . Fluorescence imaging and immunofluorescence staining/ laser-scanning confocal microscopy show SPI is cell membranepermeable, associates with the cytoplasmic tail of EGFR in NIH3T3/hEGFR, and is present in the cytoplasm, but strongly localized at the plasma membrane and in the nucleus in malignant cells harboring persistently active Stat3. Moreover, SPI specifically blocks constitutive Stat3 phosphorylation, DNA binding activity, and transcriptional function in malignant cells, with little or no effect on the induction of Stat1, Stat5, and Erk1/ 2 MAPK pathways, or on general pTyr profile at the concentrations that inhibit Stat3 activity. Significantly, treatment with SPI of human breast, pancreatic, prostate, and non-small cell lung cancer cells harboring constitutively active Stat3 induced extensive morphology changes, associated with viability loss and apoptosis. Our study identifies SPI as a novel molecular probe for interrogating Stat3 signaling and that functions as a selective inhibitor of Stat3 activation with antitumor cell effects.The binding of cytokines or growth factors to cognate receptors initiates a cascade of molecular events that culminate in the activation of the Signal Transducer and Activator of Transcription (STAT) family of proteins (1, 2). Among these is the recruitment of STATs, via the SH2 domain, to the receptor phosphotyrosine (pTyr) 2 peptide motifs, which brings them into close proximity for phosphorylation on a key tyrosyl residue by growth factor receptor tyrosine kinases, Janus kinases (Jaks), and the Src family kinases. Consequently, dimerization between two STAT monomers is promoted through a reciprocal pTyr-SH2 domain interaction, and the active STAT dimers in the nucleus bind to specific DNA-response elements in the promoters of target genes and regulate gene expression. In response to growth factors and cytokines, normal STAT signaling promotes cell growth and differentiation, development, inflammation, and immune responses. The STAT proteins are modular in structure and contain N-terminal domain, coiled-coil domain, DNA-binding domain, SH2 domain, and a transcriptional activation domain, with each domain engaging in important molecular events for promoting STAT functions. In particular, the...