Naïve CD4 T cells can differentiate into at least two different types of T helpers, Th1 and Th2 cells. Th2 cells, capable of producing IL-4, IL-5 and IL-13, are involved in humoral immunity against extracellular pathogens and in the induction of asthma and other allergic diseases. In this review, we summarize recent reports regarding the transcription factors involved in Th2 differentiation and cell expansion, including Stat5, Gfi-1 and GATA-3. Stat5 activation is necessary and sufficient for IL-2-mediated function in Th2 differentiation. Enhanced Stat5 signaling induces Th2 differentiation independent of IL-4 signaling; although it does not up-regulate GATA-3 expression, it does require the presence of GATA-3 for its action. Gfi-1, induced by IL-4, promotes the expansion of GATA-3-expressing cells. Analysis of conditional Gata3 knockout mice confirmed the critical role of GATA-3 in Th2 cell differentiation (both IL-4 dependent and IL-4 independent) and in Th2 cell proliferation and also showed the importance of basal GATA-3 expression in inhibiting Th1 differentiation.