The regulation of hematopoiesis involves the interaction of specific hematopoietic cytokines with lineage-specific transcription factors, but little is known about how these cytokines might regulate the expression/activity of these different transcription factors. Here we identify the critical signal transduction pathways that mediate the interleukin 3 (IL-3)–induced enhancement of retinoic acid receptor (RAR) transcriptional activity that accompanies the IL-3–mediated commitment of the multipotent, stem cell factor (SCF)–dependent EML cell line to granulocyte/monocyte progenitors. We observe that the addition of IL-3 to EML cells induces activation of the phosphatidylinositol-3 kinase, mitogen-activated protein kinase, and Jak/Stat pathways and that Jak2 activation is the critical “proximal” mediator of the IL-3–induced enhancement of RAR activity. Constitutively active Stat5 constructs enhance both the transcriptional activity of RARs in EML cells and the commitment of these cells to granulocyte/monocyte progenitors, whereas dominant-negative Stat5 constructs inhibit this IL-3–induced enhancement of RAR transcriptional activity. We observe that the retinoic acid response element (RARE) used in our RA responsive reporter harbors overlapping Stat/RAR-binding sites. Moreover, coimmunoprecipitation studies indicate an interaction between Stat5 and RARs that is IL-3 dependent. Thus, Stat5 is an important mediator of the IL-3–induced enhancement of RAR transcriptional activity that accompanies the commitment of immature EML cells to the granulocyte/monocyte lineage. Cytokine-mediated physical and functional interactions between Stat5 and RARs may play critical roles in regulating different stages of hematopoiesis.