Constitutive activation of the transcription factor STAT3 contributes to the pathogenesis of many cancers, including multiple myeloma (MM). Since STAT3 is dispensable in most normal tissue, targeted inhibition of STAT3 is an attractive therapy for patients with these cancers. To identify STAT3 inhibitors, we developed a transcriptionally based assay and screened a library of compounds known to be safe in humans. We found the drug nifuroxazide to be an effective inhibitor of STAT3 function. Nifuroxazide inhibits the constitutive phosphorylation of STAT3 in MM cells by reducing Jak kinase autophosphorylation, and leads to down-regulation of the STAT3 target gene Mcl-1. Nifuroxazide causes a decrease in viability of primary myeloma cells and myeloma cell lines containing STAT3 activation, but not normal peripheral blood mononuclear cells. Although bone marrow stromal cells provide survival signals to myeloma cells, nifuroxazide can overcome this survival advantage. Reflecting the interaction of STAT3 with other cellular pathways, nifuroxazide shows enhanced cytotoxicity when combined with either the histone deacetylase inhibitor depsipeptide or the MEK inhibitor UO126. Therefore, using a mechanistic-based screen, we identified the clinically relevant drug nifuroxazide as a potent inhibitor of STAT signaling that shows cytotoxicity against myeloma cells that depend on STAT3 for survival.