Interleukin-6 (IL-6)-mediated activation of signal transducer and activator of transcription 3 (STAT3) is a mechanism by which chronic inflammation can contribute to cancer and is a common oncogenic event. We discovered a pathway, the loss of which is associated with persistent STAT3 activation in human cancer. We found that the gene encoding the tumor suppressor microRNA miR-146b is a direct STAT3 target gene, and its expression was increased in normal breast epithelial cells but decreased in tumor cells. Methylation of the miR-146b promoter, which inhibited STAT3-mediated induction of expression, was increased in primary breast cancers. Moreover, we found that miR-146b inhibited nuclear factor κB (NF-κB)-dependent production of IL-6, subsequent STAT3 activation, and IL-6/STAT3-driven migration and invasion in breast cancer cells, thereby establishing a negative feedback loop. In addition, higher expression of miR-146b was positively correlated with patient survival in breast cancer subtypes with increased IL6 expression and STAT3 phosphorylation. Our results identify an epigenetic mechanism of crosstalk between STAT3 and NF-κB relevant to constitutive STAT3 activation in malignancy and the role of inflammation in oncogenesis.