Previously, we demonstrated that enforced activation of signal transducer and activator of transcription 5 (STAT5A) in human cord blood (CB)-derived stem/progenitor cells results in enhanced self-renewal and impaired myelopoiesis. The present study identifies C/EBPalpha as a critical component that is down-regulated by STAT5. Microarray and reverse transcriptase-polymerase chain reaction (RT-PCR) analysis on STAT5A(1*6)-transduced CD34(+) cells identified C/EBPalpha as the most prominently down-regulated gene. To determine the cell-biological relevance of these observations, a 4-OHT-inducible C/EBPalpha-ER protein was co-expressed with the STAT5A(1*6) mutant in CB CD34(+) cells using a retroviral approach. Re-expression of C/EBPalpha in STAT5A(1*6) cells resulted in a marked restoration of myelopoiesis. The proliferative advantage imposed on CD34(+) cells by STAT5A(1*6) depended on the down-modulation of C/EBPalpha, as reintroduction of C/EBPalpha induced a quick cell-cycle arrest and the onset of myeloid differentiation. Long-term culture-initiating cell (LTC-IC) frequencies were elevated from 0.8% +/- 0.6% to 7.8% +/- 1.9% by STAT5A(1*6) as compared with controls, but these elevated LTC-IC frequencies were strongly reduced upon re-introduction of C/EBPalpha in STAT5A(1*6) cells, and no second cobble-stone area-forming cells (CAFCs) could be generated from double-transduced cells. Enumeration of progenitors revealed that the number of colony-forming cells (CFCs) was reduced more than 20-fold when C/EBPalpha was co-expressed in STAT5A(1*6) cells. Our data indicate that down-modulation of C/EBPalpha is a prerequisite for STAT5-induced effects on self-renewal and myelopoiesis.