Malignant melanoma is a highly aggressive neoplastic disease whose incidence is increasing rapidly. In recent years, the use of interferon alpha (IFNalpha) has become the most established adjuvant immunotherapy for melanoma of advanced stage. IFNalpha is a potent inhibitor of melanoma cell proliferation, and the signal transducer and activator of transcription STAT1 is crucial for its antiproliferative action. Although advanced melanomas clinically resistant to IFNalpha are frequently characterized by inefficient STAT1 signaling, the mechanisms underlying advanced-stage interferon resistance are poorly understood. Here, we demonstrate that IFNalpha activates STAT5 in melanoma cells and that in IFNalpha-resistant cells STAT5 is overexpressed. Significantly, the knockdown of STAT5 in interferon-resistant melanoma cells restored the growth-inhibitory response to IFNalpha. When STAT5 was overexpressed in IFNalpha-sensitive cells, it counteracted interferon-induced growth inhibition. The overexpressed STAT5 diminished IFNalpha-triggered STAT1 activation, most evidently through upregulation of the inhibitor of cytokine-signaling CIS. Our data demonstrate that overexpression and activation of STAT5 enable melanoma cells to overcome cytokine-mediated antiproliferative signaling. Thus, overexpression of STAT5 can counteract IFNalpha signaling in melanoma cells, and this finally can result in cytokine-resistant and progressively growing tumor cells. These findings have significant implications for the clinical failure of IFNalpha therapy of advanced melanoma because they demonstrate that IFNalpha induces the activation of STAT5 in melanoma cells, and in STAT5-overexpressing cells, this contributes to IFNalpha resistance.