Medulloblastoma (MB), the most common malignant paediatric brain tumor, is currently treated using a combination of surgery, craniospinal radiotherapy and chemotherapy. Owing to MB stem cells (MBSCs), a subset of MB patients remains untreatable despite standard therapy. CD133 is used to identify MBSCs although its functional role in tumorigenesis has yet to be determined. In this work, we showed enrichment of CD133 in Group 3 MB is associated with increased rate of metastasis and poor clinical outcome. The signal transducers and activators of transcription-3 (STAT3) pathway are selectively activated in CD133+ MBSCs and promote tumorigenesis through regulation of c-MYC, a key genetic driver of Group 3 MB. We screened compound libraries for STAT3 inhibitors and treatment with the selected STAT3 inhibitors resulted in tumor size reduction in vivo. We propose that inhibition of STAT3 signaling in MBSCs may represent a potential therapeutic strategy to treat patients with recurrent MB.