Pancreatic -cell growth and survival and insulin production are stimulated by growth hormone and prolactin through activation of the transcription factor signal transducer and activator of transcription (STAT)5. To assess the role of STAT5 activity in -cells in vivo, we generated transgenic mice that expressed a dominant-negative mutant of STAT5a (DNSTAT5) or constitutive active mutant of STAT5b (CASTAT5) under control of the rat insulin 1 promoter (RIP). When subjected to a high-fat diet, RIP-DNSTAT5 mice showed higher body weight, increased plasma glucose levels, and impairment of glucose tolerance, whereas RIP-CASTAT5 mice were more glucose tolerant and less hyperleptinemic than wild-type mice. Although the pancreatic insulin content and relative -cell area were increased in high-fat diet-fed RIP-DNSTAT5 mice compared with wild-type or RIP-CASTAT5 mice, RIP-DNSTAT5 mice showed reduced -cell proliferation at 6 months of age. The inhibitory effect of high-fat diet or leptin on insulin secretion was diminished in isolated islets from RIP-DNSTAT5 mice compared with wild-type islets. Upon multiple low-dose streptozotocin treatment, RIP-DNSTAT5 mice exhibited higher plasma glucose levels, lower plasma insulin levels, and lower pancreatic insulin content than wild-type mice, whereas RIP-CASTAT5 mice maintained higher levels of plasma insulin. In conclusion, our results indicate that STAT5 activity in -cells influences the susceptibility to experimentally induced type 1 and type 2 diabetes.