Although the JAK/STAT pathway regulates numerous processes in vertebrates and invertebrates through modulating transcription, its functionally relevant transcriptional targets remain largely unknown. With one jak and one stat (stat92E), Drosophila provides a powerful system for finding new JAK/STAT target genes. Genome-wide expression profiling on eye discs in which Stat92E is hyperactivated, revealed 584 differentially regulated genes, including known targets domeless, socs36E, and wingless. Other differentially regulated genes (chinmo, lama, Mo25, Imp-L2, Serrate, Delta) were validated and may represent new Stat92E targets. Genetic experiments revealed that Stat92E cell-autonomously represses Serrate, which encodes a Notch ligand. Loss of Stat92E led to de-repression of Serrate in the dorsal eye, resulting in ectopic Notch signaling and aberrant eye growth there. Thus, our micro-array documents a new Stat92E target gene and a previously unidentified inhibitory action of Stat92E on Notch signaling. These data suggest that this study will be a useful resource for the identification of additional Stat92E targets.