During normal mammary gland development, the tyrosine kinase Jak2 and its main substrate, the signal transducer and activator of transcription-5 (Stat5), are critical for the growth and differentiation of alveolar progenitors as well as the survival of secretory mammary epithelial cells. Genetic studies in mouse models support a role for the Stat5 transcription factor as a proto-oncogene in mammary tumor initiation. On the other hand, the analysis of nuclear Stat5 in human breast malignancies suggests a role of the Jak2/Stat5 pathway in the restriction of the metastatic potential of neoplastic mammary epithelial cells. Following an overview on the function of the Jak2/Stat5 pathway during normal mammary gland development, this review discusses recently published observations on human breast cancers as well as experimental evidence from genetically engineered mice that propose a dual role of Jak2/Stat5 signaling in breast cancer initiation and progression. Future studies to further test the concept of contrasting effects of Jak2/Stat5 pathway on breast cancer initiation and metastatic progression are proposed.