Erythropoiesis strictly depends on signal transduction through the erythropoietin receptor (EpoR)-Janus kinase 2 (Jak2)-signal transducer and activator of transcription 5 (Stat5) axis, regulating proliferation, differentiation, and survival. The exact role of the transcription factor Stat5 in erythropoiesis remained puzzling, however, since the first Stat5-deficient mice carried a hypomorphic Stat5 allele, impeding full phenotypical analysis. Using mice completely lacking Stat5--displaying early lethality--we demonstrate that these animals suffer from microcytic anemia due to reduced expression of the antiapoptotic proteins Bcl-x(L) and Mcl-1 followed by enhanced apoptosis. Moreover, transferrin receptor-1 (TfR-1) cell surface levels on erythroid cells were decreased more than 2-fold on erythroid cells of Stat5(-/-) animals. This reduction could be attributed to reduced transcription of TfR-1 mRNA and iron regulatory protein 2 (IRP-2), the major translational regulator of TfR-1 mRNA stability in erythroid cells. Both genes were demonstrated to be direct transcriptional targets of Stat5. This establishes an unexpected mechanistic link between EpoR/Jak/Stat signaling and iron metabolism, processes absolutely essential for erythropoiesis and life.