Although HMGA1 (high-mobility group A1; formerly HMG-I/Y) is an oncogene that is widely overexpressed in aggressive cancers, the molecular mechanisms underlying transformation by HMGA1 are only beginning to emerge. HMGA1 encodes the HMGA1a and HMGA1b protein isoforms, which function in regulating gene expression. To determine how HMGA1 leads to neoplastic transformation, we looked for genes regulated by HMGA1 using gene expression profile analysis. Here, we show that the STAT3 gene, which encodes the signaling molecule signal transducer and activator of transcription 3 (STAT3), is a critical downstream target of HMGA1a. STAT3 mRNA and protein are up-regulated in fibroblasts overexpressing HMGA1a and activated STAT3 recapitulates the transforming activity of HMGA1a in fibroblasts. HMGA1a also binds directly to a conserved region of the STAT3 promoter in vivo in human leukemia cells by chromatin immunoprecipitation and activates transcription of the STAT3 promoter in transfection experiments. To determine if this pathway contributes to HMGA1-mediated transformation, we investigated STAT3 expression in our HMGA1a transgenic mice, all of which developed aggressive lymphoid malignancy. STAT3 expression was increased in the leukemia cells from our transgenics but not in control cells. Blocking STAT3 function induced apoptosis in the transgenic leukemia cells but not in controls. In primary human leukemia samples, there was a positive correlation between HMGA1a and STAT3 mRNA. Moreover, blocking STAT3 function in human leukemia or lymphoma cells led to decreased cellular motility and foci formation. Our results show that the HMGA1a-STAT3 axis is a potential Achilles heel that could be exploited therapeutically in hematopoietic and other malignancies overexpressing HMGA1a.