Lymphoid follicles are B-cell-rich compartments of lymphoid organs that function as sites of B-cell antigen encounter and differentiation. CXC chemokine receptor-5 (CXCR5) is required for B-cell migration to splenic follicles, but the requirements for homing to B-cell areas in lymph nodes remain to be defined. Here we show that lymph nodes contain two types of B-cell-rich compartment: follicles containing follicular dendritic cells, and areas lacking such cells. Using gene-targeted mice, we establish that B-lymphocyte chemoattractant (BLC/BCA1) and its receptor, CXCR5, are needed for B-cell homing to follicles in lymph nodes as well as in spleen. We also find that BLC is required for the development of most lymph nodes and Peyer's patches. In addition to mediating chemoattraction, BLC induces B cells to up-regulate membrane lymphotoxin alpha1beta2, a cytokine that promotes follicular dendritic cell development and BLC expression, establishing a positive feedback loop that is likely to be important in follicle development and homeostasis. In germinal centres the feedback loop is overridden, with B-cell lymphotoxin alpha1beta2 expression being induced by a mechanism independent of BLC.