The mechanisms underlying hypermethylation of tumor-suppressor gene promoters in cancer is not well understood. Here, we report that lysine acetylation of the oncogenic transcription factor STAT3 is elevated in tumors. We also show that genetically altering STAT3 at Lys685 reduces tumor growth, which is accompanied by demethylation and reactivation of several tumor-suppressor genes. Moreover, mutating STAT3 at Lys685 disrupts DNA methyltransferase 1-STAT3 interactions in cultured tumor cells and in tumors. These observations are confirmed by treatment with an acetylation inhibitor, resveratrol. Furthermore, reduction of acetylated STAT3 in triple-negative breast cancer cells leads to demethylation and activation of the estrogen receptor-α gene, sensitizing the tumor cells to antiestrogens. Our results also demonstrate a correlation between STAT3 acetylation and methylation of estrogen receptor-α in melanoma, which predicts melanoma progression. Taken together, these results suggest a role of STAT3 acetylation in regulating CpG island methylation, which may partially explain aberrant gene silencing in cancer. These findings also provide a rationale for targeting acetylated STAT3 for chemoprevention and cancer therapy.