Interactions between cytokine and receptor lead to the activation of multiple signalling molecules, including the family of signal transducer and activator of transcription (STAT) proteins. STAT4 is one member of this family, and is activated only in response to the cytokine interleukin (IL)-12 (refs 5, 6). By gene targeting, we have generated mice deficient in STAT4 to determine whether the function of this transcription factor is redundant with other signalling molecules activated by IL-12. IL-12-induced increases in the production of interferon (IFN)-gamma cellular proliferation and natural killer (NK) cell cytotoxicity are abrogated in lymphocytes from STAT4-deficient mice. The development of Th1 cells in response to either IL-12 of Listeria monocytogenes is also impaired in the absence of Stat4. Furthermore, Stat4-deficient lymphocytes demonstrate a propensity towards the development of Th2 cells. These results demonstrate that Stat4 is essential for mediating responses to IL-12 in lymphocytes, and regulating the differentiation of both Th1 and Th2 cells.