Heterodimers between tissue-specific basic-helix-loop-helix proteins and the gene products of E2A play major roles in determining tissue-specific cell fate. To understand the broad role of E2A in development, we have generated E2A mutant mice following homologous recombination in embryonic stem cells. Homozygous mutant mice develop to full term without apparent abnormalities, but then display a high rate of postnatal death. The surviving mice show retarded postnatal growth. Detailed examination of hematopoiesis reveals that the homozygous mutant mice contain no B cells while other lineages including T cell, granulocyte, macrophage, and erythroid are intact. The block to B cell differentiation occurs prior to immunoglobulin gene DH-JH rearrangement and the expression of the B lineage-specific marker B220. Surprisingly, heterozygous embryos contain, on average, about half as many B cells as wild-type embryos, suggesting the existence of a counting mechanism that translates levels of E2A into numbers of B cells.