Fanconi anemia (FA) cells are hypersensitive to oxidative stress and exhibit aberrant STAT activation responses to defined extracellular proteins but whether these abnormalities are linked is unclear. Because oxidative stress is known to induce STAT activation, we hypothesized that proper STAT signaling responses in normal cells exposed to H2O2 require intact FA proteins. In fact, we found that FA-C, FA-G, and FA-D2 cells (fibroblasts) showed a significant increase in apoptosis after H2O2-exposure compared to retrovirally-complemented cells. H2O2 induced higher phospho-STAT5 (P-STAT5) expression in complemented cells than in mutant cells. Conversely, mutant cells expressed higher levels of P-STAT3 in both the ground state and after H2O2-induction than complemented cells. Aberrant STAT activation in FA mutant cells was shown to be both nucleus- and JAK2 kinase-dependent. Only low levels of STAT3 and STAT5 were induced in both mutant and complemented cytoplasts and AG490 (a Jak2 inhibitor) significantly suppressed H2O2-induced STAT5 responses. Seeking a direct role of FANCD2 in regulating proper STAT activation responses to H2O2, we carried out immunoprecipitation experiments (with an antibody to the N-terminal fragment of FANCD2) using PD20, a FA-D2 mutant cell line, and FANCD2 complemented PD20. In FANCD2-complemented and normal cells, anti-FANCD2 antibody immunoprecipitated STAT5. However, in mutant cells the same antibody immunoprecipitated STAT3, not STAT5. Thus, mutant (truncated) FANCD2 preferentially binds to and may activate STAT3 in the ground state. In fact, wild type FANCD2 also binds aberrantly to STAT3 in HSC536 (FA-C lymphoblasts) indicating that FANCC may influence the function of wild type FANCD2 and that binding of wild type FANCD2 to STAT3 does not require FANCD2 ubiquitinylation (FANCD2 is not ubiquitinylated in FA-C). Suspecting that in H2O2-exposed cells STAT5 signaling pathways lead to survival while STAT3 pathways lead to apoptosis, we transduced constitutively active mutants (*) of STATs 3 and 5 in mutant D2 and complemented cells. STAT3* increased apoptotic responses to H2O2 in complemented FA-D2 cells and STAT5* decreased apoptotic responses in H2O2-induced FA-D2 cells. In addition, the STAT5 inducible anti-apoptotic gene Bcl-XL was induced in H2O2-exposed complemented FA-D2 cells but not in FA-D2 cells. We conclude that FANCD2 functions to promote survival by ordering proper STAT signaling responses to oxidative stress and that this function of FANCD2 depends in part upon FA-C. We propose that FA cells are hypersensitive to oxidative stress in part because of imbalanced STAT signal transduction responses.