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The major goal of cancer drug discovery is to find an agent that is safe and affordable, yet effective against cancer. Here we show that morin (3,5,7,2′,4′-pentahydroxyflavone) has potential against cancer cells through suppression of the signal transducer and activator of transcription 3 (STAT3) pathway, which is closely linked to the transformation, survival, proliferation, and metastasis of cancer. We found that morin completely suppressed inducible and constitutively activated STAT3 and blocked the nuclear translocation of STAT3 and its DNA binding in multiple myeloma and head and neck squamous carcinoma cells. Morin inhibited activated Src, JAK-1, and JAK-2, all of which are linked to STAT3 activation, while up-regulating a protein inhibitor of activated STAT3, PIAS3. Pervanadate reversed the effects of morin on STAT3 phosphorylation, indicating the role of a protein tyrosine phosphatase. Furthermore, morin induced SHP1 expression at both the mRNA and protein levels, and silencing of SHP1 abrogated the effect of morin on STAT3 phosphorylation, indicating that morin mediates its effects on STAT3 through SHP1. Suppression of STAT3 correlated with the down-regulation of various gene products linked to tumor survival, proliferation, and angiogenesis and led to sensitization of tumor cells to thalidomide and bortezomib. Comparing the activities of morin with those of four structurally related flavonols demonstrated the importance of hydroxyl groups in the B ring in inhibiting STAT3 activation. These findings suggest that morin suppresses the STAT3 pathway, leading to the down-regulation of STAT3-dependent gene expression and chemosensitization of tumor cells.