STAT (signal transducers and activators of transcription) proteins are dual function proteins, which participate in cytokine-mediated signal transduction events at the cell surface and transcriptional regulation in the nucleus. We have exploited insights into the activation mechanism of STAT factors to derive constitutively active variants. Chimeric genes encoding fusion proteins of STAT5 and the kinase domain of JAK2 have been derived. The functional properties of the fusion proteins have been investigated in transiently transfected COS cells or in HeLa cells stably transfected with STAT5-JAK2 gene constructs regulated by a tetracycline-sensitive promoter. The STAT5-JAK2 proteins exhibit tyrosine kinase activity and are phosphorylated on tyrosine. The molecules are activated through an intramolecular or a cross-phosphorylation reaction and exhibit constitutive, STAT5-specific DNA binding activity. The transactivation potentials of three constitutively activated STAT5-JAK2 variants comprising different transactivation domains (TADs) derived from STAT5, STAT6, and VP16 were compared. The chimeric molecule containing the STAT5 TAD had no or only a very low, the molecule with the STAT6 TAD a medium, and the molecule with the VP16 TAD a very high transactivation potential. Transcription from STAT5-responsive gene promoter regions of the beta-casein, oncostatin M, and the cytokine-inducible Src homology 2 domain-containing protein genes was observed. These chimeric STAT molecules allow the study of the function of STAT5 independent of cytokine receptors and the activation of other signal transduction pathways.