Signal transducers and activators of transcription (STAT) 1 and STAT3 are activated by overlapping but distinct sets of cytokines. STATs are recruited to the different cytokine receptors through their Src homology (SH) 2 domains that make highly specific interactions with phosphotyrosine-docking sites on the receptors. We used a degenerate phosphopeptide library synthesized on 35-m TentaGel beads and fluorescenceactivated bead sorting to determine the sequence specificity of the peptide-binding sites of the SH2 domains of STAT1 and STAT3. The large bead library allowed not only peptide sequencing of pools of beads but also of single beads. The method was validated through surface plasmon resonance measurements of the affinities of different peptides to the STAT SH2 domains. Furthermore, when selected peptides were attached to a truncated erythropoietin receptor and stably expressed in DA3 cells, activation of STAT1 or STAT3 could be achieved by stimulation with erythropoietin. The combined analysis of pool sequencing, the individual peptide sequences, and plasmon resonance measurements allowed the definition of SH2 domain binding motifs. STAT1 preferentially binds peptides with the motif phosphotyrosine-(aspartic acid/glutamic acid)-(proline/ arginine)-(arginine/proline/glutamine), whereby a negatively charged amino acid at ؉1 excludes a proline at ؉2 and vice versa. STAT3 preferentially binds peptides with the motif phosphotyrosine-(basic or hydrophobic)-(proline or basic)-glutamine. For both STAT1 and STAT3, specific high affinity phosphopeptides were identified that can be used for the design of inhibitory molecules.The signal transducers and activators of transcription (STATs) 1 constitute a family of latent cytoplasmic transcription factors that are activated by a large number of cytokines, growth factors, and hormones. The binding of these extracellular signaling polypeptides to specific cell surface receptors typically results in receptor homo-or heterodimerization and consecutive activation of receptor-associated protein tyrosine kinases of the Jak family. Activated Jak kinases phosphorylate tyrosine residues in the intracellular domains of the receptors (1). STATs then bind with their SH2 domains to these receptordocking sites. The Jak kinases phosphorylate the STATs on a single tyrosine located carboxyl-terminal to the SH2 domain (2). The tyrosine phosphorylation of STATs is the decisive activation event, resulting in STAT dimer formation through mutual SH2 domain-phosphotyrosine interactions. STAT dimers translocate into the nucleus, bind to response elements in gene promoters, and enhance the transcription of these target genes (3-5). Seven mammalian STAT genes have been identified in three chromosomal clusters (6). The different STAT proteins are activated by distinct cytokines and growth factors, and each STAT protein activates a distinct set of target genes (5, 7). The specific coupling of the different STAT family members to cytokine receptors is crucial for the generation of diverse intracellu...