Colorectal cancer (CRC) is a heterogenous malignancy underpinned by dysregulation of cellular signaling pathways. Previous literature has implicated aberrant JAK/STAT3 signal transduction in the development and progression of solid tumors. In this study we investigate the effectiveness of inhibiting JAK/STAT3 in diverse CRC models, establish in which contexts high pathway expression is prognostic and perform in depth analysis underlying phenotypes. In this study we investigated the use of JAK inhibitors for anti-cancer activity in CRC cell lines, mouse model organoids and patient-derived organoids. Immunohistochemical staining of the TransSCOT clinical trial cohort, and 2 independent large retrospective CRC patient cohorts was performed to assess the prognostic value of JAK/STAT3 expression. We performed mutational profiling, bulk RNASeq and NanoString GeoMx® spatial transcriptomics to unravel the underlying biology of aberrant signaling. Inhibition of signal transduction with JAK1/2 but not JAK2/3 inhibitors reduced cell viability in CRC cell lines, mouse, and patient derived organoids (PDOs). In PDOs, reduced Ki67 expression was observed post-treatment. A highly significant association between high JAK/STAT3 expression within tumor cells and reduced cancer-specific survival in patients with high stromal invasion (TSPhigh) was identified across 3 independent CRC patient cohorts, including the TrasnSCOT clinical trial cohort. Patients with high phosphorylated STAT3 (pSTAT3) within the TSPhigh group had higher influx of CD66b + cells and higher tumoral expression of PDL1. Bulk RNAseq of full section tumors showed enrichment of NFκB signaling and hypoxia in these cases. Spatial deconvolution through GeoMx® demonstrated higher expression of checkpoint and hypoxia-associated genes in the tumor (pan-cytokeratin positive) regions, and reduced lymphocyte receptor signaling in the TME (pan-cytokeratin- and αSMA-) and αSMA (pan-cytokeratin- and αSMA +) areas. Non-classical fibroblast signatures were detected across αSMA + regions in cases with high pSTAT3. Therefore, in this study we have shown that inhibition of JAK/STAT3 represents a promising therapeutic strategy for patients with stromal-rich CRC tumors. High expression of JAK/STAT3 proteins within both tumor and stromal cells predicts poor outcomes in CRC, and aberrant signaling is associated with distinct spatially-dependant differential gene expression.Supplementary Information: The online version contains supplementary material available at 10.1186/s13046-024-02958-4.