p53 is a tumor suppressor which exerts its function through the regulation of genes mediating cell cycle arrest and the induction of apoptosis. Cellular survival and proliferation can be positively regulated through the action of cytokines. These signals act through the activation of cell surface receptors, and the phosphorylation of intracellular signaling components, e.g. members of the Stat family (signal transducers and activators of transcription). The signaling effects of p53 and the cytokine receptors on the cellular phenotype are counteracting. We investigated the influence of p53 on the transactivation potential of Stat5. p53 repressed the prolactin induction of the Stat5 mediated transcription of the beta-casein promoter-luciferase reporter gene, but did not affect IFN-gamma induced, Stat1 dependent transcription of the IRF-1 promoter. The inhibition was not due to a decrease in the cellular concentration of Stat5 or to interference with its specific DNA binding activity. No repression of the basal transcriptional activity of the beta-casein promoter was observed. p53 mutants defective in their DNA binding or oligomerization functions had only weak inhibitory effects, but a mutant of p53 in the transactivation domain, efficiently repressed Stat5 dependent induction. The repressive function of p53 on Stat5 activity is independent of the amino-terminal transactivation domain, but requires a functional DNA binding domain and the carboxyl-terminal domain. Our experiments show that p53 counteracts Stat5 mediated cytokine induction of gene transcription. The effect is specific for Stat5 and independent of p53 induced apoptosis.