Despite of tremendous research efforts to profile prostate cancer, the genetic alterations and biological processes that correlate with disease progression remain partially elusive. In this study we show that the STAT3 small molecule inhibitor Stattic caused S-phase accumulation at low-dose levels and led to massive apoptosis at a relatively high-dose level in prostate cancer cells. STAT3 knockdown led to the disruption of the microvascular niche which tumor-initiating cells (TICs) and non-tumor initiating cells (non-TICs) depend on. Primary human prostate cancer cells and prostate cancer cell line contained high aldehyde dehydrogenase activity (ALDH high) subpopulations with stem cell-like characteristics, which expressed higher levels of the active phosphorylated form of STAT3 (pSTAT3) than that of non-ALDH high subpopulations. Stattic could singnificantly decreas the population of ALDH high prostate cancer cells even at low-dose levels. IL-6 can convert non-ALDH high cells to ALDH high cells in prostate cancer cell line as well as from cells derived from human prostate tumors, the conversion mediated by IL-6 was abrogated in the presence of STAT3 inhibitor or upon STAT3 knockdown. STAT3 knockdown significantly impaired the ability of prostate cancer cells to initiate development of prostate adenocarcinoma. Moreover, blockade of STAT3 signaling was significantly effective in eradicating the tumor-initiating and bulk tumor cancer cell populations in both prostate cancer cell-line xenograft model and patient-derived tumor xenograft (PDTX) models. This data suggests that targeting both tumor initiating and differentiated cell populations by STAT3 inhibition is predicted to have greater efficacy for prostate cancer treatment.