Cytokines, such as interleukin-2 (IL-2), activate intracellular signaling pathways via rapid tyrosine phosphorylation of their receptors, resulting in the activation of many genes involved in cell growth and survival. The deubiquitinating enzyme DUB-2 is induced in response to IL-2 but as yet its function has not been determined. The results of this study show that DUB-2 is expressed in human T-cell lymphotropic virus-I (HTLV-1)-transformed T cells that exhibit constitutive activation of the IL-2 JAK/STAT (signal transducers and activators of transcription) pathway, and when expressed in Ba/F3 cells DUB-2 markedly prolonged IL-2-induced STAT5 phosphorylation. Although DUB-2 did not enhance IL-2-mediated proliferation, when withdrawn from growth factor, cells expressing DUB-2 had sustained STAT5 phosphorylation and enhanced expression of IL-2-induced genes cis and c-myc. Moreover, DUB-2 expression markedly inhibited apoptosis induced by cytokine withdrawal allowing cells to survive. Taken together these data suggest that DUB-2 can enhance signaling through the JAK/STAT pathway, prolong lymphocyte survival, and, when constitutively expressed, may contribute to the activation of the JAK/STAT pathway observed in some transformed cells.