Although various molecular mechanisms of STAT protein (signal transducers and activators of transcription) activation have been identified, little is known about the functional role of STAT-dependent transcriptional activation. Herein we report the constitutive nuclear localization, phosphorylation, and DNA-binding activity of STAT proteins in leukemia cells and lymphoma cell lines. With the use of oligonucleotide probes derived from the Fc gamma RI promoter, the beta- casein promoter and a STAT-binding element in the promoter of the Bci-2 gene constitutive activation of STAT proteins was detected in untreated acute T- and C/B-leukemia cells (3 of 5 and 12 of 19 patients, respectively). Supershift analyses using Stats 1–6 specific antisera showed the constitutive DNA binding activity of Stat5 in these cells. Confocal microscopy revealed the nuclear localization of Stat5 and Western blot analyses showed tyrosine phosphorylation of Stat5 in nuclear extracts of acute leukemia cells. In contrast, peripheral blood mononuclear cells did not display constitutive STAT-DNA interaction. Further studies were performed on freshly isolated acute myeloid leukemia cells as well as on cell line derived K562, lymphoblastoid cells (LCL), and Burkitt's lymphoma cells (BL). Fluorescence microscopy, gelshift, and supershift experiments showed the nuclear localization and constitutive DNA-binding activity of Stat5 in K562 cells. Stat1 and Stat3 were constitutively activated in freshly isolated AML cells (10 of 14 patients) and in Epstein Barr virus- positive or interleukin-10 expressing permanent LCL and BL cells. Thus, these data indicate a differential pattern of STAT protein activation in lymphoid or myeloid leukemia and in lymphoma cells.