Signals initiated by the IL7R are required for B cell development. However, the roles that distinct IL7R-induced signaling pathways play in this process remains unclear. To identify the function of the Raf and STAT5 pathways in IL7R-dependent B cell development, we used transgenic mice that express constitutively active forms of Raf (Raf-CAAX) or STAT5 (STAT5b-CA) throughout lymphocyte development. Both Raf-CAAX and STAT5b-CA mice exhibit large increases in pro-B cells. However, crossing the Raf-CAAX transgene onto the IL7R−/− background fails to rescue B cell development. In contrast, STAT5 activation selectively restores B cell expansion in IL7R−/− mice. Notably, the expansion of pro-B cells in STAT5b-CA mice correlated with an increase in cyclin D2, pim-1, and bcl-x L expression, suggesting that STAT5 directly affects pro-B cell proliferation and survival. In addition, STAT5 activation also restored B cell differentiation in IL7R−/− mice as determined by 1) the restoration of V H Ig gene rearrangement and 2) the appearance of immature and mature B cell subsets. These findings establish STAT5 as the key player entraining B cell development downstream of the IL7R.