Stat5 is of significant interest in the search for new therapeutics for prostate cancer (PC) and hematopoietic disorders. We evaluated the transcriptomic specificity of the Stat5a/b inhibitor IST5-002 (IST5) in PC, defined more closely its mechanisms of action, and investigated the in vivo toxicity of IST5 for further optimization for clinical development. The transcriptomic specificity of IST5 vs. genetic Stat5 knockdown was evaluated by RNA-seq analysis, which showed high similarity with the Pearson correlation coefficient ranging from 0.98–0.99. The potency of IST5 vs. its derivative lacking the phosphate group in suppressing Stat5 was evaluated in two separate but complementary assays. The inhibitory activity of IST5 against kinases was investigated in cell-free assays followed by more focused evaluation in a cell-based assay. IST5 has no specific inhibitory activity against 54 kinases, while suppressing Stat5 phosphorylation and subsequent dimerization in PC cells. The phosphate group was not critical for the biological activity of IST5 in cells. The acute, sub-chronic and chronic toxicity studies of IST5 were carried out in mice. IST5 did not cause any significant toxic effects or changes in the blood profiles. The present work supports further optimization of IST5 for oral bioavailability for clinical development for therapies for solid tumors, hematological and myeloproliferative disorders.