Glucocorticoids (GCs) are potent anti-inflammatory agents that block cytokine production. We investigated whether GCs also block cytokine signaling via the Janus kinase (Jak)-signal transducer and activator of transcription (STAT) pathway. Dexamethasone inhibited IL-2-induced DNA binding, tyrosine phosphorylation, and nuclear translocation of Stat5 in primary T cells. Inhibition of Stat5 correlated with inhibition of expression of IL-2-inducible genes and T cell proliferation. The mechanism of inhibition involved suppression of IL-2 receptor and Jak3 expression. Signaling by IL-4, IL-7, and IL-15, which use IL-2 receptor components, also was inhibited, indicating a block in T cell responses similar to that seen in immunodeficient patients lacking the IL-2 receptor gamma chain or Jak3. IL-2 signaling also was blocked in patients after treatment with GCs, suggesting that inhibition of cytokine signaling contributes to the clinical efficacy of these agents. These results identify inhibition of Jak-STAT signaling by IL-2 and related cytokines as a novel mechanism of GC action and suggest that inhibition of both cytokine production and signaling contribute to their therapeutic potency.