Cytokines are soluble factors vital for mammalian physiology. Cytokines elicit highly pleiotropic activities, characterized by their ability to induce a wide spectrum of functional responses in a diverse range of cell subsets, which makes their study very challenging. Cytokines activate signalling via receptor dimerization/oligomerization, triggering activation of the JAK (Janus kinase)/STAT (signal transducer and activator of transcription) signalling pathway. Given the strong crosstalk and shared usage of key components of cytokine signalling pathways, a long-standing question in the field pertains to how functional diversity is achieved by cytokines. Here, we discuss how biophysicalfor example, ligand-receptor binding affinity and topologyand cellularfor example, receptor, JAK and STAT protein levels, endosomal compartmentparameters contribute to the modulation and diversification of cytokine responses. We review how these parameters ultimately converge into a common mechanism to fine-tune cytokine signalling that involves the control of the number of Tyr residues phosphorylated in the receptor intracellular domain upon cytokine stimulation. This results in different kinetics of STAT activation, and induction of specific gene expression programs, ensuring the generation of functional diversity by cytokines using a limited set of signalling intermediaries. We describe how these first principles of cytokine signalling have been exploited using protein engineering to design cytokine variants with more specific and less toxic responses for immunotherapy.