Overexpression of protein-tyrosine phosphatase of regenerating liver 3 (PRL-3) has been identified in about 50% of patients with acute myeloid leukemia (AML). The mechanism of regulation of PRL-3 remains obscure. Signal transducer and activator of transcription 3 (STAT3), a latent transcriptional factor, has also been often found to be activated in AML. We first identified STAT3-consensus-binding sites in the promoter of PRL-3 genes. Then we experimentally validated the direct binding and transcriptional activation. We applied shRNA-mediated knockdown and overexpression approaches in STAT3(-/-) liver cells and leukemic cells to validate the functional regulation of PRL-3 by STAT3. A STAT3 core signature, derived through data mining from publicly available gene expression data, was employed to correlate PRL-3 expression in large AML patient samples. We discovered that STAT3 binds to the -201 to -210 region of PRL-3, which was conserved between human and mouse. Importantly, PRL-3 protein was significantly reduced in mouse STAT3-knockout liver cells compared with STAT3-wild type counterparts, and ectopic expression of STAT3 in these cells led to a pronounced increase in PRL-3 protein. We demonstrated that STAT3 functionally regulated PRL-3, and STAT3 core signature was enriched in AML with high PRL-3 expression. Targeting either STAT3 or PRL-3 reduced leukemic cell viability. Silencing PRL-3 impaired invasiveness and induced leukemic cell differentiation. In conclusion, PRL-3 was transcriptionally regulated by STAT3. The STAT3/PRL-3 regulatory loop contributes to the pathogenesis of AML, and it might represent an attractive therapeutic target for antileukemic therapy.