Growth hormone controls many facets of a cell's biology through the transcription factors Stat5a and Stat5b (Stat5). However, whole body deletion of these genes from the mouse does not provide portentous information on cell‐specific cytokine signaling. To explore liver‐specific functions of Stat5, the entire Stat5 locus was deleted in hepatocytes using Cre‐mediated recombination. Notably, Stat5‐mutant mice developed fatty livers and displayed impaired proliferation of hepatocytes upon partial hepatectomy (PHx). Loss of Stat5 led to molecular consequences beyond the reduced expression of Stat5 target genes, such as those encoding suppressor of cytokine signaling 2 (SOCS2), Cish, and insulin‐like growth factor 1 (IGF‐1). In particular, circulating growth hormone levels were increased and correlated with insulin resistance and increased insulin levels. Aberrant growth hormone (GH)‐induced activation of the transcription factors Stat1 and Stat3 was observed in mutant livers. To test whether some of the defects observed in liver‐specific Stat5 deficient mice were due to aberrant Stat1 expression and activation, we generated Stat1^−/− mice with a hepatocyte‐specific deletion of Stat5. Concomitant loss of both Stat5 and Stat1 restored cell proliferation upon PHx but did not reverse fatty liver development. Thus the molecular underpinnings of some defects observed in the absence of Stat5 are the consequence of a deregulated activation of other signal transducers and activators of transcription (STAT) family members. Conclusion: Aberrant cytokine‐Stat5 signaling in hepatocytes alters their physiology through increased activity of Stat1 and Stat3. Such cross‐talk between different pathways could add to the complexity of syndromes observed in disease. (HEPATOLOGY 2007.)