Signal transducers and activators of transcription (STATs) belong to a family of transcription factors that were originally identified as mediators of cytokine-induced gene expression. Recent evidence, however, has shown that certain members of the STAT family, including STAT3, are also involved in cellular transformation. Here we show that STAT5 also plays a role in cellular transformation by the BCR-Abl oncogene. In BCR-Abl transformed K562 cells, STAT5A and 5B are constitutively phosphorylated on tyrosine and are transcriptionally active. Moreover, expression of a dominant negative form of STAT5 shows that active STAT5 is necessary for the growth in soft agar of these cells. These results show that besides STAT3, STAT5 can also be involved in cellular transformation.