Stat5 transcription factors are essential gene regulators promoting proliferation, survival, and differentiation of all hematopoietic cell types. Mutations or fusions of oncogenic tyrosine kinases often result in constitutive Stat5 activation. We have modeled persistent Stat5 activity by using an oncogenic Stat5a variant (cS5). To analyze the hitherto unrecognized role of Stat5 serine phosphorylation in this context, we have generated cS5 constructs with mutated C-terminal serines 725 and 779, either alone or in combination. Genetic complementation assays in primary Stat5(null/null) mast cells and Stat5(DeltaN) T cells demonstrated reconstitution of proliferation with these mutants. Similarly, an in vivo reconstitution experiment of transduced Stat5(null/null) fetal liver cells transplanted into irradiated wild-type recipients revealed that these mutants exhibit biologic activity in lineage differentiation. By contrast, the leukemogenic potential of cS5 in bone marrow transplants decreased dramatically in cS5 single-serine mutants or was completely absent upon loss of both serine phosphorylation sites. Our data suggest that Stat5a serine phosphorylation is a prerequisite for cS5-mediated leukemogenesis. Hence, interference with Stat5a serine phosphorylation might provide a new therapeutic option for leukemia and myeloid dysplasias without affecting major functions of Stat5 in normal hematopoiesis.