STAT5 is an important transcription factor that is constitutively activated in various types of malignancies, including chronic myelogenous leukemia (CML). Whether the antitumor effects of resveratrol (RES) are linked to its capability to inhibit STAT5 activation in CML cells was investigated. We found that RES inhibited STAT5 activation in K562 and KU812 cell lines; RES also reduced the STAT5 concentration in the nucleus of K562 and KU812 cells. Protein tyrosine phosphatase (PTP) inhibitor, sodium pervanadate, reversed the RES-induced downregulation of STAT5, suggesting the involvement of a PTP. Indeed, we observed that RES decreased the expression of tyrosine phosphatase SHP-1 and SHP-2; moreover, the deletion of SHP-1 and SHP-2 genes by siRNA abolished the ability of RES to inhibit STAT5 activation, which suggested the critical role of both SHP-1 and SHP-2 in its possible mechanism of action. RES downregulated the expression of STAT5-regulated gene products such as Bcl-xL, Bcl-2, Cyclin D1, and Mcl-1, and increased the expression of Bax. This correlated with the suppression of proliferation and induction of apoptosis. Overall, our results suggest that RES is a blocker of STAT5 activation and thus may be potentially useful for the treatment of CML.