In this study, DNA binding and tyrosine phosphorylation of STAT5A and STAT5B were compared with their subcellular localization determined using indirect immunofluorescence microscopy. Following prolactin activation, both STAT5A and STAT5B were rapidly translocated into the nucleus and displayed a detergent-resistant, punctate nuclear staining pattern. Similar to prolactin induction, src activation resulted in tyrosine phosphorylation and DNA binding of both STAT5A and STAT5B. However, nuclear translocation of only STAT5B but not STAT5A was observed. This selective nuclear translocation appears to be mediated via the carboxyl-terminal sequences in STAT5B. Furthermore, overexpression of a dominant negative kinase-inactive mutant of JAK2 prevented prolactin-induced tyrosine phosphorylation and nuclear translocation of STAT5A and STAT5B but did not block src kinase activation and nuclear translocation of STAT5B. In co-transfection assays, prolactin-mediated activation but not src kinase-mediated activation of STAT5B resulted in the induction of a beta-casein promoter-driven reporter construct. These results suggest that STAT5 activation by src may occur by a mechanism distinct from that employed in cytokine activation of the JAK/STAT pathway, resulting in the selective nuclear translocation of STAT5B.