Hyperactivation of Epidermal Growth Factor Receptor (EGFR) tyrosine kinase is prevalent in human lung cancer and its inhibition by the tyrosine kinase inhibitors (TKIs), including gefitinib and erlotinib, initially controls tumor growth. However, most patients ultimately relapse due to the development of drug resistance. In this study, we have discovered a STAT3-dependent Akt activation that impairs the efficacy of gefitinib. Mechanistically, gefitinib increased association of EGFR with STAT3, which de-repressed STAT3 from SOCS3, an upstream suppressor of STAT3. Such a de-repression of STAT3 in turn fostered Akt activation. Genetic or pharmacological inhibition of STAT3 abrogated Akt activation and combined gefitinib with STAT3 inhibition synergistically reduced the growth of the tumor cells. Taken together, this study suggests that activation of STAT3 is an intrinsic mechanism of drug resistance in response to EGFR TKIs. Combinational targeting on both EGFR and STAT3 may enhance the efficacy of gefitinib or other EGFR TKIs in lung cancer.