Tyrosine phosphorylation and activation of the transcription factor Stat5 occur in response to stimuli like granulocyte-macrophage colony-stimulating factor, interleukin-3, or erythropoietin that stimulate both proliferation and differentiation of hematopoietic cells. It is unclear whether Stat5 is part of a proliferative response or part of the events leading to cellular differentiation. Here we report that agents promoting differentiation but not proliferation of hematopoietic cells, like phorbol ester or both types of interferons (IFNs), activate Stat5 in promonocytic U937 cells. Both IFN types caused tyrosine phosphorylation and DNA binding of predominantly one Stat5 isoform (Stat5a) despite expression of both Stat5a and Stat5b proteins. Monocytic differentiation of U937 cells led to a strong decrease in IFN-gamma-mediated activation of Stat5 but not of Stat1. Transactivation of Stat5-target genes occurred in response to IFN-gamma, which activates both Stat5 and Stat1, but not in response to granulocyte-macrophage colony-stimulating factor, which activates only Stat5. Tyrosine phosphorylation of Stat5 is not generally part of the IFN response. IFN-gamma did not cause Stat5 activation in HeLa cells, despite the expression of both Stat5 isoforms at similar levels. By contrast, IFN-alpha caused tyrosine phosphorylation and DNA binding of exclusively the b isoform of Stat5, and activated Stat5b formed a DNA binding activity previously found in HeLa cells and designated IFN-alpha activation factor 2. Taken together, our results demonstrate that ligand binding of IFN receptors leads to an isoform-specific activation of Stat5 in a restricted number of cell lineages. Moreover, they suggest that Stat5 might be part of the differentiation response of myeloid cells.