S3I-201 (NSC 74859) is a chemical probe inhibitor of Stat3 activity, which was identified from the National Cancer Institute chemical libraries by using structure-based virtual screening with a computer model of the Stat3 SH2 domain bound to its Stat3 phosphotyrosine peptide derived from the x-ray crystal structure of the Stat3beta homodimer. S3I-201 inhibits Stat3.Stat3 complex formation and Stat3 DNA-binding and transcriptional activities. Furthermore, S3I-201 inhibits growth and induces apoptosis preferentially in tumor cells that contain persistently activated Stat3. Constitutively dimerized and active Stat3C and Stat3 SH2 domain rescue tumor cells from S3I-201-induced apoptosis. Finally, S3I-201 inhibits the expression of the Stat3-regulated genes encoding cyclin D1, Bcl-xL, and survivin and inhibits the growth of human breast tumors in vivo. These findings strongly suggest that the antitumor activity of S3I-201 is mediated in part through inhibition of aberrant Stat3 activation and provide the proof-of-concept for the potential clinical use of Stat3 inhibitors such as S3I-201 in tumors harboring aberrant Stat3.