Although HIV-1 (HIV) replicates poorly in non-dividing CD4 lymphocytes, resting T cells contribute to the latent reservoir. The γc-related cytokines reverse this block to HIV infection; however, the molecular mechanisms controlling this process are not understood. We asked whether the γc-cytokine regulated transcription factor, signal transducer and activator of transcription 5 (STAT5), activates HIV transcription. We identified three regions in the long terminal repeat (LTR) as close matches to the STAT5 consensus-binding site and show that STAT5 binds the LTR during HIV infection. Expression of Janus kinase 3 (JAK3) or STAT5 in primary human CD4 T cells activated LTR transcription, while transactivation-incompetent dominant-negative STAT5 inhibited JAK3-induced LTR activity and infection of activated HIV-producing CD4 T-cells. In addition, overexpression of STAT5 increased virus production in unstimulated primary T cells - both the number of p24+ cells and their level of p24 production - suggesting that STAT5 promotes a permissive state for HIV infection. These data may have implications for regulation of latency and therapeutic strategies for control of HIV disease. © 2005 Elsevier Inc. All rights reserved.