The characterisation of ligands that activate the JAK/STAT pathway has the potential to throw light onto a comparatively poorly understood aspect of this important signal transduction cascade. Here, we describe our analysis of the only invertebrate JAK/STAT pathway ligands identified to date, the Drosophila unpaired-like family. We show that upd2 is expressed in a pattern essentially identical to that of upd and demonstrate that the proteins encoded by this region activate JAK/STAT pathway signalling. Mutational analysis demonstrates a mutual semi-redundancy that can be visualised in multiple tissues known to require JAK/STAT signalling. In order to better characterise the in vivo function of these ligands, we developed a reporter based on a natural JAK/STAT pathway responsive enhancer and show that ectopic upd2 expression can effectively activate the JAK/STAT pathway. While both Upd and Upd2 are secreted JAK/STAT pathway agonists, tissue culture assays show that the signal-sequences of Upd and Upd2 confer distinct properties, with Upd associated primarily with the extracellular matrix and Upd2 secreted into the media. The differing biophysical characteristics identified for Upd-like molecules have implications for their function in vivo and adds another aspect to our understanding of cytokine signalling in Drosophila.