Interfering oncogenic STAT3 signaling is a promising anti-cancer strategy. We examined the efficacy and drug mechanism of an obatoclax analog SC-2001, a novel STAT3 inhibitor, in human breast cancer cells. Human breast cancer cell lines were used for in vitro studies. Apoptosis was examined by both flow cytometry and western blot. Signaling pathways were assessed by western blot. In vivo efficacy of SC-2001 was tested in xenograft nude mice. SC-2001 inhibited cell growth and induced apoptosis in association with downregulation of p-STAT3 (Tyr 705) in breast cancer cells. STAT3-regulated proteins, including Mcl-1, survivin, and cyclin D1, were repressed by SC-2001. Over-expression of STAT3 in MDA-MB-468 cells protected cells from SC-2001-induced apoptosis. Moreover, SC-2001 enhanced the expression of protein tyrosine phosphatase SHP-1, a negative regulator of STAT3. Furthermore, the enhanced SHP-1 expression, in conjunction with increased SHP-1 phosphatase activity, was mediated by upregulated transcription by RFX-1. Chromatin immunoprecipitation assay revealed that SC-2001 increased the binding capacity of RFX-1 to the SHP-1 promoter. Knockdown of either RFX-1 or SHP-1 reduced SC-2001-induced apoptosis, whereas ectopic expression of RFX-1 increased SHP-1 expression and enhanced the apoptotic effect of SC-2001. Importantly, SC-2001 suppressed tumor growth in association with enhanced RFX-1 and SHP-1 expression and p-STAT3 downregulation in MDA-MB-468 xenograft tumors. SC-2001 induced apoptosis in breast cancer cells, an effect that was mediated by RFX-1 upregulated SHP-1 expression and SHP-1-dependent STAT3 inactivation. Our study indicates targeting STAT3 signaling pathway may be a useful approach for the development of targeted agents for anti-breast cancer.