In previous studies, we have shown that Th2 cell differentiation is diminished but Th1 cell differentiation is increased in Stat5a-deficient (Stat5a(-/-)) CD4(+) T cells. In the present study, we clarified the molecular mechanisms of Stat5a-mediated Th cell differentiation. We found that enhanced Th1 cell differentiation and the resultant IFN-gamma production played a dominant inhibitory role in the down-regulation of IL-4-induced Th2 cell differentiation of Stat5a(-/-) CD4(+) T cells. We also found that IL-12-induced Stat4 phosphorylation and Th1 cell differentiation were augmented in Stat5a(-/-) CD4(+) T cells. Importantly, the expression of suppressor of cytokine signaling (SOCS)3, a potent inhibitor of IL-12-induced Stat4 activation, was decreased in Stat5a(-/-) CD4(+) T cells. Moreover, a reporter assay showed that a constitutively active form of Stat5a but not Stat6 activated the SOCS3 promoter. Furthermore, chromatin immunoprecipitation assays revealed that Stat5a binds to the SOCS3 promoter in CD4(+) T cells. Finally, the retrovirus-mediated expression of SOCS3 restored the impaired Th cell differentiation of Stat5a(-/-) CD4(+) T cells. These results suggest that Stat5a forces the Th1/Th2 balance toward a Th2-type by preventing IL-12-induced Th1 cell differentiation through the induction of SOCS3.