Our previous work demonstrated that the Janus kinase (JAK)-Stat3 pathway regulates expression of Bcl-x(L) in the U266 human multiple myeloma cell line and prevents Fas-mediated apoptosis. Inhibition of this pathway by the JAK selective kinase inhibitor AG490 or dominant-negative Stat3 protein results in down-regulation of Bcl-x(L) expression and enhanced sensitivity to Fas-mediated apoptosis. Because Bcl-x(L) has also been implicated in resistance to chemotherapeutic drugs, we investigated whether inhibition of the JAK-Stat3 pathway and subsequent reduction in Bcl-x(L) expression would also enhance cytotoxic drug activity. Contrary to this prediction, pretreatment of U266 myeloma cells with AG490, followed by exposure to topoisomerase II- inhibiting agents, antagonized drug-induced apoptosis. This effect correlated with reduced cyclin D1 expression and cell cycle arrest. The cell cycle arrest following AG490 pretreatment further correlated with reduced mitoxantrone-induced DNA double-strand breaks and reduced cell death, findings consistent with the critical requirement of DNA damage for drug cytotoxicity. These studies demonstrate that inhibition of the JAK-Stat3 pathway can result in paradoxical effects relative to cytotoxic drug response. These paradoxical responses may be explained by the findings that JAK-Stat3 signaling regulates the expression of multiple genes involved in controlling cell proliferation and apoptosis. Thus, understanding the cellular context of inhibiting signal transduction pathways is essential for the design of novel combination therapies for cancer.