The cumulative evidence supports STAT3, a transcriptional mediator of oncogenic signaling, as a therapeutic target in cancer. The development of STAT3 inhibitors remain an active area of research as no inhibitors have yet to be approved for cancer treatment. In a continuing effort to develop more potent STAT3 inhibitors based on our previously identified hit compound 16w, a series of benzothiazole derivatives with unique binding mode in SH2 domain of STAT3 were designed, synthesized and biologically evaluated. Of note, compound B19 demonstrated excellent activity against IL-6/STAT3 signaling pathway with the IC<sub>50</sub> value as low as 0.067 μM as determined by a luciferase reporter assay. Moreover, multiple compounds displayed potent antiproliferative activity against MDA-MB-468 and JAK2 mutant HEL cell lines. Further biochemical study using Western blot assay indicated that B19 blocked the phosphorylation of STAT3 at Tyr 705 and Ser 727 and thus suppressed STAT3-mediated gene expression of c-MYC and MCL-1. Simultaneously, it induced cancer cell G2/M phase arrest and apoptosis both in MDA-MB-468 and HEL cell lines. Finally, molecular docking study along with surface plasmon resonance (SPR) and fluorescence polarization (FP) assays disclosed the binding mode of B19 in STAT3 SH2 domain. Taken together, our finding suggests that B19 is a promising therapeutic STAT3 inhibitor for cancer treatment.