Background. The small molecule drug CP-690,550 inhibits Janus kinase 3 at nanomolar concentrations and has recently been shown to prevent allograft rejection in rodents and nonhuman primates. Methods. As part of a phase I clinical trial, we investigated the effect of CP-690,550 after 29 days of 30 mg twice daily treatment at the cellular level in eight kidney transplant patients by studying ex vivo phosphorylation of STAT5 (P-STAT5), the key substrate of JAK3. Results. As determined by quantitative fluorescent western blotting, interleukin-2-induced P-STAT5 in YT cells was reduced by a median of 73% (P<0.01) in the presence of serum collected on day 29 compared with pretreatment baseline. When evaluated by phosphospecific flow cytometry, CP-690,550 also reduced interleukin-2-induced P-STAT5 in CD3(-) (median 20%; P<0.05), CD3(+)CD4(+) (median 37%; P<0.05), and CD3(+)CD8(+) (median 34%; P<0.01) populations in patient-derived peripheral blood mononuclear cells. At the functional level, the inhibitory effect of CP-690,550 was confirmed by determining the expression of several STAT5 targets genes. Conclusion. Analysis of P-STAT5 may, therefore, be used to determine the immunomodulatory effect of CP-690,550 at the cellular level in transplant patients.