Raf kinase inhibitor protein (RKIP) is a member of the phosphatidylethanolamine-binding-protein (PEBP) family that modulates the action of many kinases involved in cellular growth, apoptosis, epithelial to mesenchymal transition, motility, invasion and metastasis. Previously, we described an inverse association between RKIP and signal transducers and activators of transcription 3 (STAT3) expression in gastric adenocarcinoma patients. In this study, we elucidated the mechanism by which RKIP regulates STAT3 activity in breast and prostate cancer cell lines. RKIP over expression inhibited c-Src autophosphorylation and activation, as well as IL-6-, JAK1 and 2-, and activated Raf-mediated STAT3 tyrosine and serine phosphorylation and subsequent activation. In MDA-231 breast cancer cells that stably over express RKIP, IL-6 treatment blocked STAT3 phosphorylation and transcriptional activation. Conversely, in RKIP knockdown MDA-231 cells: STAT3 phosphorylation and activation increased in comparison to parental MDA-231 cells. RKIP over expression resulted in constitutive physical interaction with STAT3 and blocked c-Src and STAT3 association. The treatment of DU145 prostate, but not PC3 prostate or MDA-231 breast, cancer cell lines with ENMD-1198 or MKC-1 dramatically increased expression of RKIP. Overexpression of RKIP sensitized PC3 and MDA-231 cells to MTI-induced apoptosis. Moreover, MTI treatment resulted in a decrease in Src-mediated STAT3 tyrosine phosphorylation and activation, an effect that was significantly enhanced by RKIP over expression. In stable RKIP over expressing MDA-231 cells, tumor xenograft growth induced by activated STAT3 is inhibited. RKIP synergizes with MTIs to induce apoptosis and inhibit STAT3 activation of breast and prostate cancer cells. RKIP plays a critical role in opposing the effects of pro-oncogenic STAT3 activation.