We have generated mice that carry a germline mutation in which a large portion of the RAG-2 coding region is deleted. Homozygous mutants are viable but fail to produce mature B or T lymphocytes. Very immature lymphoid cells were present in primary lymphoid organs of mutant animals as defined by surface marker analyses and Abelson murine leukemia virus (A-MuLV) transformation assays. However, these cells did not rearrange their immunoglobulin or T cell receptor loci. Lack of V(D)J recombination activity in mutant pre-B cell lines could be restored by introduction of a functional RAG-2 expression vector. Therefore, loss of RAG-2 function in vivo results in total inability to initiate V(D)J rearrangement, leading to a novel severe combined immune deficient (SCID) phenotype. Because the SCID phenotype was the only obvious abnormality detected in RAG-2 mutant mice, RAG-2 function and V(D)J recombinase activity, per se, are not required for development of cells other than lymphocytes.