Pseudokinases lack conserved motifs typically required for kinase activity. Nearly half of pseudokinases bind ATP, but only few retain phosphotransfer activity, leaving the functional role of nucleotide binding in most cases unknown. Janus kinases (JAKs) are nonreceptor tyrosine kinases with a tandem pseudokinase-kinase domain configuration, where the pseudokinase domain (JAK homology 2, JH2) has important regulatory functions and harbors mutations underlying hematological and immunological diseases. JH2 of JAK1, JAK2, and TYK2 all bind ATP, but the significance of this is unclear. We characterize the role of nucleotide binding in normal and pathogenic JAK signaling using comprehensive structure-based mutagenesis. Disruption of JH2 ATP binding in wildtype JAK2 has only minor effects, and in the presence of type I cytokine receptors, the mutations do not affect JAK2 activation. However, JH2 mutants devoid of ATP binding ameliorate the hyperactivation of JAK2 V617F. Disrupting ATP binding in JH2 also inhibits the hyperactivity of other pathogenic JAK2 mutants, as well as of JAK1 V658F, and prevents induction of erythrocytosis in a JAK2 V617F myeloproliferative neoplasm mouse model. Molecular dynamic simulations and thermal-shift analysis indicate that ATP binding stabilizes JH2, with a pronounced effect on the C helix region, which plays a critical role in pathogenic activation of JAK2. Taken together, our results suggest that ATP binding to JH2 serves a structural role in JAKs, which is required for aberrant activity of pathogenic JAK mutants. The inhibitory effect of abrogating JH2 ATP binding in pathogenic JAK mutants may warrant novel therapeutic approaches.T he Janus kinases (JAK1-3, TYK2) are a family of nonreceptor tyrosine kinases with essential functions in the regulation of hematopoiesis, the immune system, and cellular metabolism. JAKs interact specifically with various cytokine receptors and couple cytokine binding to cytoplasmic signaling cascades, including the signal transducers and activators of transcription (STAT) pathway. JAKs consist of an N-terminal FERM domain, an SH2-like (Src homology 2) domain, a pseudokinase domain (JAK homology 2, JH2), and the C-terminal tyrosine kinase domain (JH1). JH2 mediates critical regulatory functions in JAKs and primarily serves to inhibit basal JH1 activity. Experimental deletion of JH2 increases JH1 activity in full-length JAK in the absence of stimulation (1-3), and in recombinant systems addition of JH2 suppresses JH1 activity (4-6). JH2 is, however, also required for ligand-induced activation of full-length JAKs in cell (1-3, 6, 7). The regulatory functions of JH2 are corroborated by the multitude of human disease mutations identified in the domain. The most common JAK2 mutation, V617F, leads to cytokine-independent signaling through the exclusively JAK2-dependent homotypic receptors for erythropoietin (EPO), granulocyte colony stimulating factor (G-CSF), and thrombopoietin (8). The V617F mutation is found in ∼95% of patients with polycythemia vera (PV) (9...