Diol-type ginsenosides, such as protopanaxadiol (PPD), exhibit antioxidation, anti-inflammation, and antitumor effects. However, the antitumor effect of these ginsenosides and the mechanism of PPD remain unclear. In this work, the antitumor effects of several derivatives, including PPD, Rg5, Rg3, Rh2, and Rh3, were evaluated in five different cancer cell lines. PPD demonstrated the best inhibitory effects on the proliferation and migration of the five cancer cell lines, especially the hepatocellular carcinoma (HCC) cell lines. Therefore, the mechanism of action of PPD in HCC cells was elucidated. PPD inhibited the proliferation, migration, and invasion ability of HepG2 and PLC/PRF/5 cells in a dose-dependent manner. Western blot and immunofluorescence assay showed that PPD can alter the expression of epithelial-mesenchymal transition markers, increase E-cadherin expression, and decrease vimentin expression. Docking and biacore experiments revealed that STAT3 is the target protein of PPD, which formed hydrogen bonds with Gly583/Leu608/Tyr674 at the SH2 domain of STAT3. PPD inhibited the phosphorylation of STAT3 and its translocation from the cytosol to the nucleus, thereby inhibiting the expression of Twist1. PPD also inhibited tumor volume and tumor lung metastasis in PLC/PRF/5 xenograft model. In conclusion, PPD can inhibit the proliferation and metastasis of HCC cells through the STAT3/Twist1 pathway.