Interleukin-2 (IL-2) induces DNA binding of STAT5, a member of the family of cytokine-regulated transcription factors termed 'signal transducers and activators of transcription'. IL-2-stimulated STAT5-DNA complexes include two tyrosine phosphoproteins which exhibit distinct mobilities in SDS-PAGE gels. Our studies have shown that IL-2 rapidly induces both tyrosine phosphorylation and serine phosphorylation of STAT5 and that the two STAT5 tyrosine phosphoproteins detected in IL-2-activated cells differ in their levels of phosphorylation on serine residues. The two different phosphoforms of STAT5 have identical in vitro DNA binding specificity and reactivity with tyrosine phosphopeptides, but differ in their cellular localization. As well, the present data indicate that the transcriptional activity of STAT5 is regulated by serine kinases in T lymphocytes. Two previously characterized serine kinases activated by IL-2, MAP kinase/ERK2 and p70 S6 kinase, do not appear to be involved in STAT5 regulation by this cytokine. Accordingly, STAT5 activation in T cells requires the convergent action of tyrosine kinases and a distinct serine/threonine kinase which has not previously been implicated in IL-2 signalling.