Accumulating evidence suggests that STAT-mediated signaling plays critical roles in cell differentiation and/or cell expansion and that in turn, STAT-mediated signaling is regulated strictly by many mechanisms. In murine mast cells, when Stat6 is activated by IL-4 and translocated to the nucleus, Stat6 is cleaved by a nucleus-associated protease (namely Stat6-protease). Similarly, the activated Stat5 is cleaved by a protease (Stat5-protease) in the nucleus of myeloid progenitors. These STAT proteases cleave the corresponding STAT proteins at the carboxyl-terminus and the resultant STAT proteins function as dominant negative molecules. Functionally, Stat6-protease protects mast cells from Stat6-dependent growth inhibition while Stat5-protease maintains the immature state of myeloid progenitors. In addition, it has been shown that the activated Stat3 is cleaved in mature neutrophils. These findings indicate that the proteolytic processing of STAT proteins by the nucleus-associated protease functions as a lineage-specific negative-regulator of STAT-mediated signaling.