IL-6 is an inflammatory cytokine that has been linked to aggressive prostate cancer (PCa). Previous studies have demonstrated that IL-6 can enhance the differentiation of PCa cells toward a neuroendocrine (NE) phenotype, a possible indicator of hormone-refractory disease. In this report, we present evidence that the mechanism of IL-6-stimulated NE differentiation employs a detergent-resistant (lipid raft) membrane compartment for signal transduction in LNCaP PCa cells. Signal transducer and activator of transcription (STAT)3, a mediator of IL-6 signaling, was rapidly phosphorylated and translocated to the nucleus in LNCaP cells treated with IL-6. Both processes were inhibited by filipin, a cholesterol-binding compound that disrupts plasma membrane lipid rafts. Isolation of Triton X-100-insoluble raft fractions from LNCaP cells by discontinuous sucrose gradient centrifugation demonstrated that the 80-kDa IL-6 receptor localized almost exclusively to the raft compartment. Although STAT3 was located predominantly in the Triton X-100-soluble subcellular fraction in exponentially growing cells, abundant phosphorylated STAT3 was detected in the raft fraction after stimulation with IL-6. Increases in expression of the NE marker, neuron-specific enolase, and neuron-specific enolase promoter activity after IL-6 treatment were reduced after membrane rafts were disrupted by filipin treatment. LNCaP cells expressed the raft-resident proteins flotillin-2 and G_iα2, but notably not caveolins, the predominant structural protein present in caveolar membrane rafts in many tissues and tumor cells. These results are the first to define a role for lipid raft membrane microdomains in signal transduction mechanisms capable of promoting the NE phenotype in PCa cells, and they demonstrate that the raft compartment is capable of mediating such signals in the absence of caveolins. Our results also suggest a mechanistic role for membrane cholesterol in cell signaling events relevant to PCa progression.