Overexpression of PRL-3, an oncogenic phosphatase, was identified as a novel cluster in patients with newly diagnosed multiple myeloma. However, the regulation and oncogenic activities of PRL-3 in multiple myeloma warrant further investigation. Here, we report that IL6 activates STAT3, which acts as a direct transcriptional regulator of PRL-3. Upregulation of PRL-3 increased myeloma cell viability and rephosphorylated STAT3 in a biphasic manner through direct interaction and deactivation of SHP2, thus blocking the gp130 (Y759)-mediated repression of STAT3 activity. Abrogation of PRL-3 reduced myeloma cell survival, clonogenicity, and tumorigenesis, and detailed mechanistic studies revealed "deactivation" of effector proteins such as Akt, Erk1/2, Src, STAT1, and STAT3. Furthermore, loss of PRL-3 efficiently abolished nuclear localization of STAT3 and reduced its occupancy on the promoter of target genes c-Myc and Mcl-1, and antiapoptotic genes Bcl2 and Bcl-xL. PRL-3 also played a role in the acquired resistance of myeloma cells to bortezomib, which could be overcome by PRL-3 silencing. Of clinical relevance, STAT3 and PRL-3 expression was positively correlated in five independent cohorts, and the STAT3 activation signature was significantly enriched in patients with high PRL-3 expression. Furthermore, PRL-3 could be used as a biomarker to identify high-risk patients with multiple myeloma that exhibited poor prognosis and inferior outcome even when treated with novel combinational therapeutics (proteasome inhibitors and immunomodulatory imide drugs). Conclusively, our results support a feedforward mechanism between STAT3 and PRL-3 that prolongs prosurvival signaling in multiple myeloma, and suggest targeting PRL-3 as a valid therapeutic opportunity in multiple myeloma. SIGNIFICANCE: IL6 promotes STAT3-dependent transcriptional upregulation of PRL-3, which in turn re-phosphorylates STAT3 and aberrantly activates STAT3 target genes, leading to bortezomib resistance in multiple myeloma.