Tumor suppressor and upstream master kinase Liver kinase B1 (LKB1) plays a significant role in suppressing cancer growth and metastatic progression. We show that low-LKB1 expression significantly correlates with poor survival outcome in breast cancer. In line with this observation, loss-of-LKB1 rendered breast cancer cells highly migratory and invasive, attaining cancer stem cell-like phenotype. Accordingly, LKB1-null breast cancer cells exhibited an increased ability to form mammospheres and elevated expression of pluripotency-factors (Oct4, Nanog and Sox2), properties also observed in spontaneous tumors in Lkb1-/- mice. Conversely, LKB1-overexpression in LKB1-null cells abrogated invasion, migration and mammosphere-formation. Honokiol (HNK), a bioactive molecule from Magnolia grandiflora increased LKB1 expression, inhibited individual cell-motility and abrogated the stem-like phenotype of breast cancer cells by reducing the formation of mammosphere, expression of pluripotency-factors and aldehyde dehydrogenase activity. LKB1, and its substrate, AMP-dependent protein kinase (AMPK) are important for HNK-mediated inhibition of pluripotency factors since LKB1-silencing and AMPK-inhibition abrogated, while LKB1-overexpression and AMPK-activation potentiated HNK's effects. Mechanistic studies showed that HNK inhibited Stat3-phosphorylation/activation in an LKB1-dependent manner, preventing its recruitment to canonical binding-sites in the promoters of Nanog, Oct4 and Sox2. Thus, inhibition of the coactivation-function of Stat3 resulted in suppression of expression of pluripotency factors. Further, we showed that HNK inhibited breast tumorigenesis in mice in an LKB1-dependent manner. Molecular analyses of HNK-treated xenografts corroborated our in vitro mechanistic findings. Collectively, these results present the first in vitro and in vivo evidence to support crosstalk between LKB1, Stat3 and pluripotency factors in breast cancer and effective anticancer modulation of this axis with HNK treatment.