Cytokine-dependent gene transcription greatly depends on the tyrosine phosphorylation (“activation”) of Stat proteins at the cell membrane. This rapidly leads to their accumulation in the nucleus by an unknown mechanism. We performed microinjections of recombinant Stat1 protein to show that nuclear accumulation of phosphorylated Stat1 can occur without cytokine stimulation of cells. Microinjection of Stat1 antibody and treatment of cells with kinase or phosphatase inhibitors revealed that nuclear accumulation is a highly dynamic process sustained by Stat1 nucleocytoplasmic cycling and continuous kinase activity. By characterizing nuclear accumulation mutants, it is demonstrated that nuclear import and nuclear retention are two separate steps leading up to nuclear accumulation, with nonspecific DNA binding of activated Stat1 being sufficient for nuclear retention. Critical for nuclear buildup of Stat1 and the subsequent nuclear export is the point of time of tyrosine dephosphorylation, because our data indicate that activated Stat1 is incapable of leaving the nucleus and requires dephosphorylation to do so. It is demonstrated that the inactivation of Stat1 is controlled by its exchange reaction with DNA, whereby DNA binding protects Stat1 from dephosphorylation in a sequence-specific manner. Thus, during nuclear accumulation, a surprisingly simple mechanism integrates central aspects of cytokine-dependent gene regulation, for example, receptor monitoring, promoter occupancy, and transcription factor inactivation.