The transcription factors peroxisome proliferator-activated receptor (PPAR) and signal transducer and activator of transcription 5 (STAT5) activate genes involved in fatty acid metabolism (PPARalpha) and adipogenesis (PPARgamma) and mediate hormonal responses important for body growth, liver gene expression, and mammary gland development (STAT5a and STAT5b). These seemingly disparate pathways are subject to mutually inhibitory crosstalk, with growth hormone (GH)-activated STAT5 able to inhibit PPAR-regulated gene transcription by approximately 80%, and conversely, ligand-activated PPAR able to inhibit STAT5-regulated transcription to a similar degree. Given the co-expression of PPAR and STAT5 in multiple tissues, we investigated whether one of the factors dominates the inhibitory crosstalk. A PPAR-responsive Renilla luciferase reporter was constructed and used to monitor PPAR transcriptional activity in COS-1 cells co-transfected with a STAT5 firefly luciferase reporter. In cells co-stimulated with GH and a PPAR agonist, STAT5b inhibited expression of the PPAR-regulated Renilla luciferase reporter, whereas PPARalpha and PPARgamma inhibited transcription of the STAT5b-regulated firefly luciferase reporter. The extent of the inhibitory crosstalk was dependent on the relative levels of expression of each transcription factor and on the relative concentrations of GH and PPAR agonist. Dose-response studies revealed that STAT5b was inhibited at an approximately 7-fold lower concentration of the PPARgamma ligand troglitazone than was required for activation of PPARgamma, indicating that only a portion of cellular PPARgamma is needed for STAT5b inhibition. Similarly, mono-(2-ethylhexyl)phthalate (MEHP), a reproductive toxicant and primary metabolite of the environmental chemical di-(2-ethylhexyl)phthalate (DEHP), inhibited STAT5b transcriptional activity with an EC50 value of 1.1 microM, corresponding to an approximately 10-fold lower concentration than required for activation of PPARgamma-dependent transcription. We conclude that the cross-inhibition between PPAR and STAT5 proceeds in a simultaneous, bidirectional manner. Exposure to phthalates and other environmental chemical activators of PPARs may thus lead to alteration of hormone-induced, STAT5-regulated gene expression in tissues such as liver, fat and breast, where both transcription factors are expressed. Conversely, STAT5-activating hormones and cytokines may modulate the responsiveness of PPARs to their foreign chemical ligands.