Inactivation of the tumor suppressor phosphatase and tensin homolog (mutated in multiple advanced cancers 1) (PTEN) is recognized as a major event in the pathogenesis of the brain tumor glioblastoma. However, the mechanisms by which PTEN loss specifically impacts the malignant behavior of glioblastoma cells, including their proliferation and propensity for invasiveness, remain poorly understood. Genetic studies suggest that the transcription factor signal transducers and activators of transcription 3 (STAT3) harbors a PTEN-regulated tumor suppressive function in mouse astrocytes. Here, we report that STAT3 plays a critical tumor suppressive role in PTEN-deficient human glioblastoma cells. Endogenous STAT3 signaling is specifically inhibited in PTEN-deficient glioblastoma cells. Strikingly, reactivation of STAT3 in PTEN-deficient glioblastoma cells inhibits their proliferation, invasiveness, and ability to spread on myelin. We also identify the chemokine interleukin 8 (IL8) as a novel target gene of STAT3 in human glioblastoma cells. Activated STAT3 occupies the endogenous IL8 promoter and directly represses IL8 transcription. Consistent with these results, IL8 is upregulated in PTEN-deficient human glioblastoma tumors. Importantly, IL8 repression mediates STAT3 inhibition of glioblastoma cell proliferation, invasiveness, and spreading on myelin. Collectively, our findings uncover a novel link between STAT3 and IL8, the deregulation of which plays a key role in the malignant behavior of PTEN-deficient glioblastoma cells. These studies suggest that STAT3 activation or IL8 inhibition may have potential in patient-tailored treatment of PTEN-deficient brain tumors.