In the secondary lymphoid organs, intimate contact with follicular dendritic cells (FDCs) is required for B cell retention and Ag-driven selection during the germinal center response. However, selection of self-reactive B cells by Ag on FDCs has not been addressed. To this end, we generated a mouse model to conditionally express a membrane-bound self-antigen on FDCs and to monitor the fate of developing self-reactive B cells. In this article, we show that self-antigen displayed on FDCs mediates effective elimination of self-reactive B cells at the transitional stage. Notwithstanding, some self-reactive B cells persist beyond this checkpoint, showing evidence of Ag experience and intact proximal BCR signaling, but they are short-lived and unable to elicit T cell help. These results implicate FDCs as an important component of peripheral B cell tolerance that prevents the emergence of naive B cells capable of responding to sequestered self-antigens.