Stat5 (signal transducer and activator of transcription 5) is an essential mediator of cytokine receptor signaling and plays important roles in the proliferation of alveolar progenitors and the survival of functionally differentiated epithelial cells in the mammary gland. A deregulated expression and activation of Stat5 leads to precocious alveolar development in the absence of pregnancy hormones, impaired mammary gland remodeling following the cessation of lactation, and mammary tumor formation. We reported previously that Stat5 induces the transcription of the Akt1 gene from a novel promoter. In this report, we provide experimental evidence that Akt1 is an essential mediator for the biological function of Stat5 as a survival factor. Additionally, Stat5 controls the expression of the regulatory and catalytic subunits of the phosphatidylinositol 3-kinase (PI3K) (p85α and p110α), thereby greatly augmenting signaling through the prosurvival PI3K/Akt pathway. In agreement with this model, we observed that the constitutive activation of Stat5 cooperates with the loss of function of the tumor suppressor PTEN by accelerating the formation of preneoplastic lesions and mammary tumors. The mammary gland-specific ablation of Stat5 is sufficient to prevent mammary carcinogenesis in a genuine mouse model for Cowden syndrome. Therefore, targeting the Jak2/Stat5 pathway might be a suitable strategy to prevent breast cancer in patients that carry a mutant PTEN allele.