The role of STAT (signal transducer and activator of transcription) proteins in T cell receptor (TCR) signaling was analyzed. STAT5 became immediately and transiently phosphorylated on tyrosine 694 in response to TCR stimulation. Expression of the protein tyrosine kinase Lck, a key signaling protein in the TCR complex, activated DNA binding of transfected STAT5A and STAT5B to specific STAT inducible elements. The role of Lck in STAT5 activation was confirmed in a Lck-deficient T cell Line in which the activation of STAT5 by TCR stimulation was abolished. Expression of Lck induced specific interaction of STAT5 with the subunits of the TCR, indicating that STAT5 may be directly involved in TCR signaling. Stimulation of T cell clones and primary T cell lines also induced the association of STAT5 with the TCR complex. Inhibition of STAT5 function by expression of a dominant negative mutant STAT5 reduced antigen-stimulated proliferation of T cells. Thus, TCR stimulation appears to directly activate STAT5, which may participate in the regulation of gene transcription and T cell proliferation during immunological responses.