Extracellular hormones, growth factors and cytokines relay their effects on the transcription of genes through the recognition of specific receptors and intracellular signalling molecules. Signal transducers and activators of transcription (STATs) have been recognized as crucial intracellular signalling molecules. The cytokine receptor-associated Janus kinases (JAKs) convert the latent monomeric form of the STAT molecules to the activated dimeric form through tyrosine phosphorylation. The dimers bind to specific DNA response elements and are able to induce transcription. This induction requires the full-length form of the STAT molecules. Negative regulatory potential is exerted by the short form of the molecule, which lacks the trans-activation domain. This short form is activated and dimerized, but dephosphorylation is impaired. The short form of STAT occupies the DNA-binding sites in a stable fashion and acts as a strong suppressor of wild-type action. Positive enhancement of STAT5 trans-activation potential is provided by the glucocorticoid receptor. Ligand activation of this receptor causes the formation of a complex with STAT5 and deviation to the STAT5 DNA-binding site. An additional regulatory loop is provided by the reactivation of the short form of STAT5 through glucocorticoid receptor association. Conversely, classical glucocorticoid-responsive genes are negatively affected by STAT5 activation.