Although the cytokine-inducible transcription factor signal transducer and activator of transcription 5 (STAT5) promotes proliferation of a wide range of cell types, there are cell-specific and context-specific cases in which loss of STAT5 results in enhanced cell proliferation. Here, we report that loss of STAT5 from mouse embryonic fibroblasts (MEFs) leads to enhanced proliferation, which was linked to reduced levels of the cell cycle inhibitors p15INK4B and p21CIP1. We further demonstrate that growth hormone, through the transcription factor STAT5, enhances expression of the Cdkn2b (cyclin-dependent kinase inhibitor 2B) gene and that STAT5A binds to interferon-gamma–activated sequence sites within the promoter. We recently demonstrated that ablation of STAT5 from liver results in hepatocellular carcinoma upon CCl4 treatment. We now establish that STAT5, like in MEFs, activates expression of the Cdkn2b gene in liver tissue. Loss of STAT5 led to diminished p15INK4B and increased hepatocyte proliferation. Conclusion: This study for the first time demonstrates that cytokines, through STAT5, induce the expression of a key cell cycle inhibitor. These experiments therefore shed mechanistic light on the context-specific role of STAT5 as tumor suppressor. (HEPATOLOGY 2010;52:1808-1818)