A limited number of evolutionarily conserved signal transduction pathways are repeatedly reused during development to regulate a wide range of processes. Here we describe a new negative regulator of JAK/STAT signaling and identify a potential mechanism by which the pleiotropy of responses resulting from pathway activation is generated in vivo. As part of a genetic interaction screen, we have identified Ken & Barbie (Ken) , which is an ortholog of the mammalian proto-oncogene BCL6 , as a negative regulator of the JAK/STAT pathway. Ken genetically interacts with the pathway in vivo and recognizes a DNA consensus sequence overlapping that of STAT92E in vitro. Tissue culture-based assays demonstrate the existence of Ken-sensitive and Ken-insensitive STAT92E binding sites, while ectopically expressed Ken is sufficient to downregulate a subset of JAK/STAT pathway target genes in vivo. Finally, we show that endogenous Ken specifically represses JAK/STAT-dependent expression of ventral veins lacking (vvl) in the posterior spiracles. Ken therefore represents a novel regulator of JAK/STAT signaling whose dynamic spatial and temporal expression is capable of selectively modulating the transcriptional repertoire elicited by activated STAT92E in vivo.