Diverse cytokines necessary for normal lymphopoiesis and lymphocyte homeostasis activate STAT5 in responder cells. Although STAT5 has been suggested to be a central molecular effecter of IL-7 function, its essential role during IL-7-dependent T cell development in vivo remained unclear. Using Stat5(-/-) mice we now show that STAT5 is essential for various functions ascribed to IL-7 in vivo. STAT5 is required for embryonic thymocyte production, TCRgamma gene transcription, and Peyer's patch development. In sharp contrast, normal STAT5 is dispensable for adult thymopoiesis. In peripheral lymphocytes, STAT5 is primarily required for the generation and/or maintenance of gammadelta T cells and TCRgammadelta(+) intraepithelial lymphocytes. Collectively, these results demonstrate that STAT5 is critical for many, but not all, aspects of steady state lymphoid lineage development and maintenance and suggest the existence of previously undocumented cytokine signaling traits and/or cytokine milieu during adult thymopoiesis.