Many cytokines activate two highly homologous Stat proteins, 5a and 5b. Mice deficient in both genes lack all growth hormone and prolactin functions but retain functions associated with cytokines such as erythropoietin. Here, we demonstrate that, while lymphoid development is normal, Stat5a/b mutant peripheral T cells are profoundly deficient in proliferation and fail to undergo cell cycle progression or to express genes controlling cell cycle progression. In addition, the mice lack NK cells, develop splenomegaly, and have T cells with an activated phenotype, phenotypes seen in IL-2 receptor beta chain-deficient mice. These phenotypes are not seen in mice lacking Stat5a or Stat5b alone. The results demonstrate that the Stat5 proteins, redundantly, are essential mediators of IL-2 signaling in T cells.