During pregnancy, mammary tissue undergoes expansion and differentiation, leading to lactation, a process regulated by the hormone prolactin through the JAK2-STAT5 pathway. STAT5 activation is key to successful lactation making the mammary gland an ideal experimental system to investigate the impact of human missense mutations on mammary tissue homeostasis. Here, we investigated the effects of two human variants in the STAT5B SH2 domain, which convert tyrosine 665 to either phenylalanine (Y665F) or histidine (Y665H), both shown to activate STAT5B in cell culture. We ported these mutations into the mouse genome and found distinct and divergent functions. Homozygous Stat5bY665H mice failed to form functional mammary tissue, leading to lactation failure, with impaired alveolar development and greatly reduced expression of key differentiation genes. STAT5BY665H failed to recognize mammary enhancers and impeded STAT5A binding. In contrast, mice carrying the Stat5bY665F mutation exhibited abnormal precocious development, accompanied by an early activation of the mammary transcription program and the induction of otherwise silent genetic programs. Physiological adaptation was observed in Stat5bY665H mice as continued exposure to pregnancy hormones led to lactation. In summary, our findings highlight that human STAT5B variants can modulate their response to cytokines and thereby impact mammary homeostasis and lactation.