Abelson murine leukemia virus-transformed cell lines have provided a critical model system for studying the regulation of B cell development. However, transformation by v-Abl blocks B cell development, resulting in the arrest of these transformants in an early pre-B cell-like state. We report here that treatment of Abelson virus-transformed pre-B cell lines with the small molecule Abl kinase inhibitor (STI571) results in their differentiation to a late pre-B cell-like state characterized by induction of immunoglobulin (Ig) light chain gene rearrangement. DNA microarray analyses enabled us to identify two genes inhibited by v-Abl that encode the Igk 3' enhancer-binding transcription factors Spi-B and IRF-4. We show that enforced expression of these two factors is sufficient to induce germline Igk transcription in Abelson-transformed pro-B cell lines. This suggests a key role for these factors, and perhaps for c-Abl itself, in the regulated activation of Ig light chain gene rearrangement.