The activation of signal transducers and activators of transcription 3 (STAT3) has been linked with the proliferation of a variety of human cancer cells, including multiple myeloma. Agents that can suppress STAT3 activation have potential for prevention and treatment of cancer. In the present report, we tested an agent, ursolic acid, found in basil, apples, prunes, and cranberries, for its ability to suppress STAT3 activation. We found that ursolic acid, a pentacyclic triterpenoid, inhibited both constitutive and interleukin-6-inducible STAT3 activation in a dose- and time-dependent manner in multiple myeloma cells. The suppression was mediated through the inhibition of activation of upstream kinases c-Src, Janus-activated kinase 1, Janus-activated kinase 2, and extracellular signal-regulated kinase 1/2. Vanadate treatment reversed the ursolic acid-induced down-regulation of STAT3, suggesting the involvement of a tyrosine phosphatase. Indeed, we found that ursolic acid induced the expression of tyrosine phosphatase SHP-1 protein and mRNA. Moreover, knockdown of SHP-1 by small interfering RNA suppressed the induction of SHP-1 and reversed the inhibition of STAT3 activation, thereby indicating the critical role of SHP-1 in the action of this triterpene. Ursolic acid down-regulated the expression of STAT3-regulated gene products such as cyclin D1, Bcl-2, Bcl-xL, survivin, Mcl-1, and vascular endothelial growth factor. Finally, ursolic acid inhibited proliferation and induced apoptosis and the accumulation of cells in G1-G0 phase of cell cycle. This triterpenoid also significantly potentiated the apoptotic effects of thalidomide and bortezomib in multiple myeloma cells. Overall, these results suggest that ursolic acid is a novel blocker of STAT3 activation that may have a potential in prevention and treatment of multiple myeloma and other cancers.