Interleukin-7 (IL-7) supports the growth and chemoresistance of T-cell acute lymphoblastic leukemia (T-ALL), particularly the early T-cell precursor subtype (ETP-ALL), which frequently has activating mutations of IL-7 signaling. Signal transducer and activator of transcription (STAT5) is an attractive therapeutic target because it is almost universally activated in ETP-ALL, even in the absence of mutations of upstream activators such as the IL-7 receptor (IL-7R), Janus kinase, and Fms-like tyrosine kinase 3 (FLT3). To examine the role of activated STAT5 in ETP-ALL, we have used a Lmo2-transgenic (Lmo2Tg) mouse model in which we can monitor chemoresistant preleukemia stem cells (pre-LSCs) and leukemia stem cells (LSCs) that drive T-ALL development and relapse following chemotherapy. Using IL-7R-deficient Lmo2Tg mice, we show that IL-7 signaling was not required for the formation of pre-LSCs but essential for their expansion and clonal evolution into LSCs to generate T-ALL. Activated STAT5B was sufficient for the development of T-ALL in IL-7R-deficient Lmo2Tg mice, indicating that inhibition of STAT5 is required to block the supportive signals provided by IL-7. To further understand the role of activated STAT5 in LSCs of ETP-ALL, we developed a new transgenic mouse that enables T-cell specific and doxycycline-inducible expression of the constitutively activated STAT5B1∗6 mutant. Expression of STAT5B1∗6 in T cells had no effect alone but promoted expansion and chemoresistance of LSCs in Lmo2Tg mice. Pharmacologic inhibition of STAT5 with pimozide-induced differentiation and loss of LSCs, while enhancing response to chemotherapy. Furthermore, pimozide significantly reduced leukemia burden in vivo and overcame chemoresistance of patient-derived ETP-ALL xenografts. Overall, our results demonstrate that STAT5 is an attractive therapeutic target for eradicating LSCs in ETP-ALL.