Signal transducer and activator of transcription 5b (STAT5b), the major liver-expressed STAT5 form, is phosphorylated on both tyrosine and serine in GH-stimulated cells. Although tyrosine phosphorylation is known to be critical for the dimerization, nuclear translocation, and activation of STAT5b DNA-binding and transcriptional activities, the effect of STAT5b serine phosphorylation is uncertain. Presently, we identify Ser730 as the site of STAT5b serine phosphorylation in GH-stimulated liver cells. We additionally show that the serine kinase inhibitor H7 partially blocks the GH-stimulated formation of (Ser,Tyr)-diphosphorylated STAT5b without inhibiting STAT5b nuclear translocation. Evaluation of the functional consequences of STAT5b serine phosphorylation by mutational analysis revealed an approximately 50% decrease in GH-stimulated luciferase reporter gene activity regulated by an isolated STAT5-binding site when STAT5b Ser730 was mutated to alanine and under conditions where STAT5 DNA-binding activity was not diminished. No decrease in GH-stimulated reporter activity was seen with the corresponding STAT5a-Ser725Ala mutant; however, a decrease in reporter activity occurred when the second established STAT5a serine phosphorylation site, serine 779, was additionally mutated to alanine. Unexpectedly, STAT5a-Ser725,779Ala and STAT5b-Ser730Ala displayed approximately 2-fold higher GH- or PRL-stimulated transcriptional activity compared with wild-type STAT5b when assayed using an intact beta-casein promoter-luciferase reporter. Finally, STAT5b-stimulated gene transcription was abolished in cells treated with H7, but in a manner unrelated to the inhibitory effects of H7 on STAT5b Ser730 phosphorylation. These findings suggest that the effects of STAT5b and STAT5a serine phosphorylation on STAT-stimulated gene transcription can be modulated by promoter context. Moreover, in the case of STAT5a, phosphorylation of serine 779, but not serine 725, may serve to regulate target gene transcriptional activity.