Expression of the type I transmembrane glycoprotein CD44 has recently been recognized as a signature for cancer stem cells. In this study, we demonstrate that CD44, once engaged, is internalized and translocated to the nucleus, where it binds to various promoters, including that of cyclin D1, leading to cell fate change through transcriptional reprogramming. In regulating cyclin D1 expression, the internalized CD44 forms a complex with STAT3 and p300 (acetyltransferase), eliciting STAT3 acetylation at lysine 685 and dimer formation in a cytokine- and growth factor-independent manner. A bipartite nuclear localization signal (NLS) was mapped to the cytoplasmic tail of CD44, which mediates its nuclear translocation. Expression of CD44(NLS) mutant sequesters STAT3 in cytosol. In the nucleus, the acetylated STAT3 dimer remains associated with CD44 and binds to the cyclin D1 promoter, leading to increased cyclin D1 expression and cell proliferation. This study describes a novel function for CD44 in transcriptional modulation through nuclear translocation of the internalized CD44 and complex formation with transcription factors.