The rat homolog of sheep mammary gland factor (MGF)/Stat5 has been isolated and used to study the regulation of Stat5 during mammary gland development and PRL regulation in COS cells transfected with Stat5a and the PRL receptor. Two alternatively spliced isoforms, designated Stat5a1 and Stat5a2, were identified, the latter encoding a carboxy-terminal truncated protein. A polyclonal antibody to a carboxy-terminal peptide of Stat5a1 was generated and used to measure the level of this isoform during mammary gland development and after PRL induction in COS cells transiently transfected with Stat5a and the long form of the PRL receptor. Surprisingly, Stat5a mRNA and protein were readily detected both in virgin rats and after mammary gland involution. The levels of Stat5a increased during pregnancy, were highest in late pregnancy, and then, unexpectedly, decreased during lactation, the time at which the highest levels of milk protein gene expression are observed. Electrophoretic mobility shift assays using the specific anti-Stat5a1 antisera demonstrated that Stat5a1 comprises part of the heterogeneous, PRL-inducible, protein-DNA complex associated with the beta-casein GAS site. Immunocytochemical analysis detected considerable cytoplasmic and some nuclear staining for Stat5a1 during late pregnancy and predominantly nuclear staining during early lactation. The lack of correspondence of Stat5a gene expression and beta-casein gene expression suggests that Stat5 activation may facilitate the interaction of other factors binding within composite response elements identified recently in the milk protein gene promoters that are then responsible for the stable expression of milk protein genes in terminally differentiated mammary epithelial cells.