Cytokine-mediated STAT5 protein activation is vital for lymphocyte development and function. In vitro tyrosine phosphorylation of a C-terminal tyrosine is critical for activation of STAT5A and STAT5B; however, the importance of STAT5 tyrosine phosphorylation in vivo has not been assessed. Here we generate Stat5a and Stat5b tyrosine-to-phenylalanine mutant knockin mice and find they have greatly reduced CD8+ T-cell numbers and profoundly diminished IL-2-induced proliferation of these cells, and this correlates with reduced induction of Myc, pRB, a range of cyclins and CDKs, and a partial G1→S phase-transition block. These mutant CD8+ T cells also exhibit decreased IL-2-mediated activation of pERK and pAKT, which we attribute in part to diminished expression of IL-2Rβ and IL-2Rγ. Our findings thus demonstrate that tyrosine phosphorylation of both STAT5A and STAT5B is essential for maximal IL-2 signaling. Moreover, our transcriptomic and proteomic analyses elucidate the molecular basis of the IL-2-induced proliferation of CD8+ T cells.