Stat3 is an Src homology (SH)2-containing protein constitutively activated in a wide variety of human cancers following its recruitment to YXXQ-containing motifs, which results in resistance to apoptosis. Despite resolution of the crystal structure of Stat3 homodimer bound to DNA, the structural basis for the unique specificity of Stat3 SH2 for YXXQ-containing phosphopeptides remains unresolved. We tested three models of this interaction based on computational analysis of available structures and sequence alignments, two of which assumed an extended peptide configuration and one in which the peptide had a beta-turn. By using peptide immunoblot affinity assays and mirror resonance affinity analysis, we demonstrated that only phosphotyrosine (Tyr(P)) peptides containing +3 Gln (not Leu, Met, Glu, or Arg) bound to wild type Stat3. Examination of a series of wild type and mutant Stat3 proteins demonstrated loss of binding to pYXXQ-containing peptides only in Stat3 mutated at Lys-591 or Arg-609, whose side chains interact with the Tyr(P) residue, and Stat3 mutated at Glu-638, whose amide hydrogen bonds with oxygen within the +3 Gln side chain when the peptide ligand assumes a beta-turn. These findings support a model for Stat3 SH2 interactions that could form the basis for anticancer drugs that specifically target Stat3.