Abstract Purpose: Recombinant tumor necrosis factor–related apoptosis-inducing ligand (TRAIL) is a promising antitumor agent. However, many hepatocellular carcinoma (HCC) cells show resistance to TRAIL-induced apoptosis. Here, we report that sorafenib improves the antitumor effect of TRAIL-related agents in resistant HCC. Experimental Design: HCC cell lines (PLC5, Huh-7, Hep3B, and Sk-Hep1) were treated with sorafenib and/or TRAIL-related agents (TRAIL or LBY135) and analyzed in terms of apoptosis and signal transduction. In vivo efficacy was determined in nude mice with PLC5 xenografts. Results: Sorafenib, the only approved drug for HCC, sensitizes resistant HCC cells to an agonistic DR5 antibody (LBY135) and TRAIL-induced apoptosis in TRAIL-resistant HCC cells. We found that STAT3 played a significant role in mediating TRAIL sensitization. Our data showed that sorafenib downregulated phospho-STAT3 (pSTAT3) and subsequently reduced the expression levels of STAT3-related proteins (Mcl-1, survivin, and cyclin D1) in a dose- and time-dependent manner in TRAIL-treated HCC cells. Knockdown of STAT3 by RNA interference overcame apoptotic resistance to TRAIL in HCC cells, and ectopic expression of STAT3 in HCC cells abolished the TRAIL-sensitizing effect of sorafenib. Moreover, SHP-1 inhibitor reversed downregulation of pSTAT3 and apoptosis induced by sorafenib, and silencing of SHP-1 by RNA interference abolished the effects of sorafenib on pSTAT3. Notably, sorafenib increased SHP-1 activity in PLC5 cells. Finally, sorafenib plus LBY135 significantly suppressed PLC5 xenograft tumor growth. Conclusions: Sorafenib sensitizes resistant HCC cells to TRAIL-induced apoptosis at clinical achievable concentrations, and this effect is mediated via the inhibition of STAT3. Clin Cancer Res; 16(21); 5189–99. ©2010 AACR.