IL-2 activates several distinct signaling pathways that are important for T cell activation, proliferation, and differentiation into both Th1 and Th2 phenotypes. IL-4, the major cytokine that promotes differentiation of Th2 cells, has been shown to block signaling of the Th1-promoting cytokine IL-12. As IL-2 synergizes with IL-12 in promoting Th1 differentiation, the effects of IL-4 on IL-2 signal transduction were investigated. IL-4 suppressed activation of DNA binding and tyrosine phosphorylation of the transcription factor Stat5 by IL-2, and suppressed the expression of the IL-2-inducible genes CD25, CIS, the PGE2 receptor, and cytokine responsive (CR) genes CR1 and CR8. Activation of Stat5 by cytokines that share a common gamma receptor subunit, IL-2, IL-7, and IL-15, was suppressed by preculture in IL-4. Activation of the Jak1 and Jak3 kinases that are proximal to Stat5 in the IL-2-Jak-STAT signaling pathway was suppressed, and this correlated with inhibition of IL-2Rbeta subunit expression. In contrast to suppression of Stat5, proliferative responses to IL-2 were augmented in IL-4-cultured cells, and activation of proliferative pathways leading to activation of mitogen activated protein kinases, induction of expression of Myc, Fos, Pim-1, and cyclin D3, and decreased levels of the cyclin-dependent kinase inhibitor p27 were intact. These results identify molecular mechanisms underlying interactions between IL-4 and IL-2 in T cells and demonstrate that one mechanism of regulation of IL-2 activity is selective and differential modulation of signaling pathways.