STAT5 regulates definitive (adult stage) erythropoiesis through its ability to transduce signals from the erythropoietin receptor. A function for STAT-dependent signaling during primitive (embryonic) erythropoiesis has not been analyzed. We tested this in the Xenopus system, because STAT5 is expressed at the right time and place to regulate development of the embryonic primitive ventral blood island. Depletion of STAT5 activity results in delayed accumulation of the first globin-expressing cells, indicating that the gene does regulate primitive erythropoiesis. Our results suggest that in this context STAT5 functions as a repressor, since forced expression of an activator isoform blocks erythropoiesis, while embryos expressing a repressor isoform develop normally. The erythroid phenotype caused by the activator isoform of STAT5 resembles that caused by overexpression of fibroblast growth factor (FGF). We show that STAT5 isoforms can function epistatic to FGF and can be phosphorylated in response to hyperactivated FGF signaling in Xenopus embryos. Therefore, our data indicate that STAT5 functions in both primitive and definitive erythropoiesis, but by different mechanisms.