The comprehensive identification of functional transcription factor binding sites (TFBSs) is an important step in understanding complex transcriptional regulatory networks. This study presents a motif-based comparative approach, STAT-Finder, for identifying functional DNA binding sites of STAT3 transcription factor. STAT-Finder combines STAT-Scanner, which was designed to predict functional STAT TFBSs with improved sensitivity, and a motif-based alignment to minimize false positive prediction rates. Using two reference sets containing promoter sequences of known STAT3 target genes, STAT-Finder identified functional STAT3 TFBSs with enhanced prediction efficiency and sensitivity relative to other conventional TFBS prediction tools. In addition, STAT-Finder identified novel STAT3 target genes among a group of genes that are over-expressed in human cancer cells. The binding of STAT3 to the predicted TFBSs was also experimentally confirmed through chromatin immunoprecipitation. Our proposed method provides a systematic approach to the prediction of functional TFBSs that can be applied to other TFs.