The signal transducer and activator of transcription 5 (Stat5) plays a pivotal role in the proliferation, secretory differentiation, and survival of mammary epithelial cells. However, there is little information about Stat5 target genes that facilitate these biological processes. We provide here experimental evidence that the prolactin-mediated phosphorylation of Stat5 regulates the transcriptional activation of the Akt1 gene. Stat5 binds to consensus sequences within the Akt1 locus in a growth factor-dependent manner to initiate transcription of a unique Akt1 mRNA from a distinct promoter, which is only active in the mammary gland. Elevating the levels of active Akt1 restores the expression of cyclin D1 and proliferation of Jak2-deficient mammary epithelial cells, which provides evidence that Akt1 acts downstream of Jak/Stat signaling. The ligand-inducible expression of Stat5 in transgenic females mediates a sustained upregulation of Akt1 in mammary epithelial cells during the onset of postlactational involution. Stat5-expressing mammary glands exhibit a delay in involution despite induction of proapoptotic signaling events. Collectively, the results of the present study elucidate an underlying mechanism by which active Stat5 mediates evasion from apoptosis and self-sufficiency in growth signals.