Interleukin‐3 (IL‐3) is an important regulator of hemopoiesis and considerable effort has been directed towards the study of its mechanism of signal transduction. In this paper, we describe the first molecular identification of a STAT transcription factor that is activated by IL‐3. STATs exist in a cytoplasmic, transcriptionally inactive form which, in response to extracellular signals, become tyrosine phosphorylated and translocate to the nucleus where they bind to specific DNA elements. Several of these DNA elements were found which bind proteins in an IL‐3‐responsive manner. Analysis of these bandshift complexes with available antibodies to the known STATs suggests that IL‐3 activates the DNA‐binding ability of STAT5, a protein which was originally characterized as a prolactin‐responsive transcription factor in sheep. IL‐5 and granulocyte‐macrophage colony stimulating factor (GM‐CSF), which share a common signaling receptor subunit with IL‐3, also activate STAT5. Unexpectedly, two murine STAT5 homologs, 96% identical to each other at the amino acid level, were isolated and IL‐3‐dependent GAS binding could be reconstituted in COS cells transfected with IL‐3 receptor and either STAT5 cDNA. In IL‐3‐dependent hemopoietic cells, both forms of STAT5 are expressed and activated in response to IL‐3.