Signal transducer and activator of transcription 3 (STAT3) mediates cellular responses to diverse cytokines and growth factors by modulating the expression of specific target genes. While phosphorylation of STAT3 at Tyr-705 has been demonstrated to be a prerequisite for STAT3 dimerization, nuclear translocation, and activation of gene transcription, the role of Ser-727 in regulation of STAT3 activity is controversial. Kinetworks KPSS-1.1 phospho-site screening of nocodazole-treated HeLa cells revealed that STAT3 Ser-727 phosphorylation was enhanced during mitosis, and this correlated with a reduction of Tyr-705 phosphorylation. Overexpression of STAT3 mutants in which these phosphorylation sites were separately abolished revealed that phosphorylation at these sites appeared to be mutually antagonistic. The nocodazole-induced STAT3 Ser-727 phosphorylation was reduced by selective inhibition of CDK1 phosphotransferase activity, and CDK1 could directly phosphorylate GST-STAT3 Ser-727 in vitro and co-immunoprecipitate with STAT3 in vivo. Blocking Ser-727 phosphorylation enhanced STAT3 DNA-binding activity toward its target gene promoters, implying a negative effect of Ser-727 phosphorylation on its transcriptional activity. Interference of Ser-727 phosphorylation resulted in an exit from mitotic arrest induced by nocodazole treatment and a cell cycle arrest at the G1 phase, as indicated by the accumulation of 2N cell population and enhanced expression of G1 cell cycle regulators including p21(CIP1/WAF1), p27(Kip1), and cyclin E. Taken together, our observations point to a novel role of STAT3 Ser-727 phosphorylation in control of the onset and maintenance of the M phase during the cell cycle through downregulation of CDK inhibitors.