The direct actions of transmembrane receptors within the nucleus remain enigmatic. In this report, we demonstrate that the prolactin receptor (PRLr) localizes to the nucleus where it functions as a coactivator through its interactions with the latent transcription factor signal transducer and activator of transcription 5a (Stat5a) and the high-mobility group N2 protein (HMGN2). We identify a novel transactivation domain within the PRLr that is activated by ligand-induced phosphorylation, an event coupled to HMGN2 binding. The association of the PRLr with HMGN2 enables Stat5a-responsive promoter binding, thus facilitating transcriptional activation and promoting anchorage-independent growth. We propose that HMGN2 serves as a critical regulatory factor in Stat5a-driven gene expression by facilitating the assembly of PRLr/Stat5a onto chromatin and that these events may serve to promote biological events that contribute to a tumorigenic phenotype. Our data imply that phosphorylation may be the molecular switch that activates a cell surface receptor transactivation domain, enabling it to tether chromatin-modifying factors, such as HMGN2, to target promoter regions in a sequence-specific manner.