Abstract Purpose: The incidence of hepatocellular carcinoma is increasing in the United States, and liver cancer is the second leading cause of cancer-related mortality worldwide. Nonalcoholic steatohepatitis (NASH) is becoming an important risk for hepatocellular carcinoma, and most patients with hepatocellular carcinoma have underlying liver cirrhosis and compromised liver function, which limit treatment options. Thus, novel therapeutic strategies to prevent or treat hepatocellular carcinoma in the context of NASH and cirrhosis are urgently needed. Experimental Design: Constitutive activation of STAT3 is frequently detected in hepatocellular carcinoma tumors. STAT3 signaling plays a pivotal role in hepatocellular carcinoma survival, growth, angiogenesis, and metastasis. We identified C188-9, a novel small-molecule STAT3 inhibitor using computer-aided rational drug design. In this study, we evaluated the therapeutic potential of C188-9 for hepatocellular carcinoma treatment and prevention. Results: C188-9 showed antitumor activity in vitro in three hepatocellular carcinoma cell lines. In mice with hepatocyte-specific deletion of Pten (HepPten− mice), C188-9 treatment blocked hepatocellular carcinoma tumor growth, reduced tumor development, and reduced liver steatosis, inflammation, and bile ductular reactions, resulting in improvement of the pathological lesions of NASH. Remarkably, C188-9 also greatly reduced liver injury in these mice as measured by serum aspartate aminotransferase and alanine transaminase levels. Analysis of gene expression showed that C188-9 treatment of HepPten− mice resulted in inhibition of signaling pathways downstream of STAT3, STAT1, TREM-1, and Toll-like receptors. In contrast, C188-9 treatment increased liver specification and differentiation gene pathways. Conclusions: Our results suggest that C188-9 should be evaluated further for the treatment and/or prevention of hepatocellular carcinoma. Clin Cancer Res; 23(18); 5537–46. ©2017 AACR.