The V617F activating point mutation in Jak2 has recently been detected in a high proportion of patients with the myeloproliferative disorders polycythemia vera, essential thrombocythemia, and idiopathic myelofibrosis. Using the Jak2V617F-mutant erythroid leukemia cell line HEL as a model, potential mechanisms that contribute to transformation were investigated. Inhibition of Jak2V617F with a small molecule kinase inhibitor reduced cell growth of HEL cells in a dose dependent manner with an IC50 of 300 nM. This inhibition of growth was associated with a G1 cell cycle arrest, with minimal or delayed apoptosis. The major Jak2 target in normal hematopoietic cells, STAT5, was found to be activated by Jak2V617F. Treatment of the cells with either a Jak2 kinase inhibitor, or with a Jak2-targeted siRNA, decreased STAT5 activation, and also resulted in decreased expression of cyclin D2 and increased expression of p27Kip. Of interest, we found that Jak2V617F induced high levels of reactive oxygen species (ROS), an activity associated with several other tyrosine kinase oncogenes. Expression of a constitutively active form of STAT5 by itself was capable reducing expression of p27Kip and increasing production of ROS, suggesting that each of these signaling events are downstream of STAT5. Additionally, treatment of HEL cells with the anti-oxidant N-acetylcystein increased expression of p27Kip, suggesting that Jak2V617F regulates cell cycle progression at least in part through STAT5 activation of ROS, and ROS regulation of p27Kip. Cell growth of HEL cells was found to be blocked by anti-oxidants. Overall, our results suggest that constitutive activation of Jak2 contributes to a transforming phenotype and therefore hints at novel targets for drug development that may aid traditional therapy.