Signal transducer and activator of transcription 5 (Stat5) mediates signaling of many cytokines and growth factors. Here we show that Stat5 functions as an initial mediator of adipogenesis. The preadipocyte cell line 3T3-L1 undergoes adipocyte differentiation upon appropriate hormonal induction. We found that Stat5A and Stat5B were strongly activated at an early stage of 3T3-L1 differentiation. To investigate physiological roles of Stat5 in adipogenesis, we have constructed 3T3-L1 cell lines in which either an exogenous wild type (wt) or dominant negative (dn) form of Stat5A expression was controlled under the doxycycline-regulatable promoter. Precocious induction of wt-Stat5A in adipocyte differentiation promoted accumulation of triglycerides within the cells. In contrast, induction of dn-Stat5A attenuated lipid accumulation. Northern blot analyses revealed that the expression of proadipogenic transcription factors was influenced in a complementary fashion by ectopic expression of either wt- or dn-Stat5A. Notably, Stat5 regulated expression of peroxisome proliferator-activated receptor-gamma, which plays crucial roles in adipogenesis. We have also generated transgenic mice in which dn-Stat5A is expressed in an adipose tissue-specific fashion and found attenuation of peroxisome proliferator-activated receptor-gamma and of many adipocyte-related genes. These results highlight a novel role of Stat5 in adipocyte differentiation.