Thymic stromal lymphopoietin (TSLP) is a newly identified cytokine that uniquely promotes B lymphopoiesis to the B220+/IgM+ immature B cell stage. In addition, TSLP shares many biological properties with the related cytokine IL-7. This can be explained by the finding that the receptor complexes for TSLP and IL-7 both contain the IL-7R α-chain; IL-7Rα is paired with the common γ-chain (γc) in the IL-7 receptor complex and the unique TSLP-R chain in the TSLP receptor complex. Although TSLP and IL-7 both induce tyrosine phosphorylation of the transcription factor Stat5, only IL-7-mediated signal transduction could be associated with activation of Janus family kinases (Jaks). Because Stat5 phosphorylation following cytokine stimulation is generally mediated by Jaks, the lack of Jak activation after TSLP treatment suggested the possibility that tyrosine-phosphorylated Stat5 may be nonfunctional. Herein, we demonstrate that TSLP induces a functional Stat5 transcription factor in that TSLP stimulation results in Stat5-DNA complex formation and transcription of the Stat5-responsive gene CIS. We also show that the TSLP receptor complex is functionally reconstituted using TSLP-R and IL-7Rα and that TSLP-mediated signal transduction requires Stat5. Moreover, TSLP-mediated signaling is inhibited by suppressor of cytokine signaling (SOCS)-1 and a kinase-deficient version of Tec but not by kinase-deficient forms of Jak1 and Jak2.