Crispene E, a new clerodane-type diterpene, inhibited STAT3 dimerization in a cell-free fluorescent polarisation assay and was found to have significant toxicity against STAT3-dependent MDA-MB 231 breast cancer cell line and selectively inhibited the expression of STAT3 and STAT3 target genes cyclin D1, Fascin and bcl-2. Molecular docking studies suggest the molecule inhibits STAT3 by interacting with its SH2 domain. The compound has been isolated from Tinospora crispa and characterized using standard spectroscopic techniques.