Metazoan development is regulated by transcriptional networks, which must respond to extracellular cues including cytokines. The JAK/STAT pathway is a highly conserved regulatory module, activated by many cytokines, in which tyrosine-phosphorylated STATs (pSTATs) function as transcription factors. However, the mechanisms by which STAT activation modulates lineage-affiliated transcriptional programs are unclear. We demonstrate that in the absence of thrombopoietin (TPO), tyrosine-unphosphorylated STAT5 (uSTAT5) is present in the nucleus where it colocalizes with CTCF and represses a megakaryocytic transcriptional program. TPO-mediated phosphorylation of STAT5 triggers its genome-wide relocation to STAT consensus sites with two distinct transcriptional consequences, loss of a uSTAT5 program that restrains megakaryocytic differentiation and activation of a canonical pSTAT5-driven program which includes regulators of apoptosis and proliferation. Transcriptional repression by uSTAT5 reflects restricted access of the megakaryocytic transcription factor ERG to target genes. These results identify a previously unrecognized mechanism of cytokine-mediated differentiation.