We have investigated the activation of the STAT5 protein during the differentiation of myelomonocytic cells. In the human U937 promonocytic cell line, STAT5 activation occurred in response to several inducers of monocytic differentiation (phorbol ester, 1alpha,25-dihydroxyvitamin D3, and retinoic acid). In the promyelocytic HL60 cell line, STAT5 was activated in the course of either phorbol ester-induced monocytic differentiation or DMSO-induced granulocytic differentiation. To test for involvement of STAT5 in the differentiation of primary nonimmortalized cells, chicken myeloid progenitor cells transfected with the ts21-E26 avian retrovirus were studied. At 37 degrees C the temperature-sensitive oncoprotein of the ts21-E26 virus (p135(gag-myb-ets)) installs a differentiation block that is released by a shift to the nonpermissive temperature (42 degrees C). Both proliferation and differentiation of ts21-E26-transfected myeloblasts require the continuous presence of chicken myelomonocytic growth factor (cMGF). Addition of cMGF to growth factor-starved cells rapidly caused STAT5 tyrosine phosphorylation, DNA binding, and transcriptional activity at both permissive and nonpermissive temperatures. Moreover, the temperature shift-induced onset of myelomonocytic differentiation strictly correlated with the appearance of activated STAT5 in ts21-E26-infected myeloblasts, but not in cells infected with wtE26 retrovirus. These data position STAT5 in a nuclear signaling cascade induced by the cMGF receptor and suggest a contribution of STAT5 to the process of myelomonocytic differentiation or to the functional changes that accompany the maturation of myeloid progenitor cells to a terminally differentiated stage.