Mesenchymal stem cells (MSCs) have the potential to be the source for cell-based therapies. However, MSCs can undergo malignant transformation in a tumor microenvironment where a high level of interleukin (IL)-6 is present. In this study, we investigated the role of IL-6 and signal transducer and activator of transcription 3 (STAT3) signaling in malignant transformation of MSCs. Rat MSCs were isolated and indirectly cocultured with C6 glioma cells. Coculture of MSCs with astrocytes was used as a control. After 7 days of culture, the cells were assessed for malignant transformation using MTT assay and immunofluorescence staining. The levels of hepatocyte growth factor, IL-6, and basic fibroblast growth factor, and the expression of STAT3 and soluble IL-6 receptor in the cultured cells and conditioned media were measured using RT-PCR, ELISA, and Western blot analysis. The expression levels of STAT3 downstream targets, CyclinD1 and Bcl-xl, were determined as well. Our data showed that almost all of the MSCs became phenotypically malignant after indirect coculture with glioma cells, which was confirmed by tumor formation assays when these cells were injected into nude mice. The expression of IL-6 was significantly increased in MSCs cocultured with glioma cells, which was associated with significantly increased expressions of soluble IL-6 receptor, transmembrane glycoprotein GP130, STAT3, phosphorylated STAT3, CyclinD1, and Bcl-xl. Similar results were obtained when the MSCs were treated with IL-6. Treatment of the cocultured MSCs and glioma cells with STA-21, to block the constitutive STAT3 signaling, reduced the risk of MSC tumor-like transformation in the tumor microenvironment. These data suggest that IL-6 plays a critical role in malignant transformation of rat MSCs, which is associated with an enhancement of the STAT3 signaling pathway in the tumor microenvironment.