Type I interferons (IFNalpha and IFNbeta) transduce signals by inducing tyrosine phosphorylation of Jaks and Stats, as well as the CrkL adapter, an SH2/SH3-containing protein which provides a link to downstream pathways that mediate growth inhibition. We report that Stat5 interacts constitutively with the IFN receptor-associated Tyk-2 kinase, and during IFNalpha stimulation its tyrosine-phosphorylated form acts as a docking site for the SH2 domain of CrkL. CrkL and Stat5 then form a complex that translocates to the nucleus. This IFN-inducible CrkL-Stat5 complex binds in vitro to the TTCTAGGAA palindromic element found in the promoters of a subset of IFN-stimulated genes. Thus, during activation of the Type I IFN receptor, CrkL functions as a nuclear adapter protein and, in association with Stat5, regulates gene transcription through DNA binding.