Plasma cells (PC) or Ig-secreting cells (ISC) are terminally differentiated B cells responsible for the production of protective Ig. ISC can be generated in vitro by culturing human B cells with the T cell-derived stimuli CD40L, IL-2, and IL-10. ISC have traditionally been identified by the increased expression of CD38, analogous to primary human PC, and the acquired ability to secrete Ig. By tracking the proliferation history of activated B cells, we previously reported that the differentiation of memory B cells into CD38(+) B cells is IL-10 dependent, and increases in frequency with cell division. However, <50% of CD38(+) cells secreted Ig, and there was a population of CD38(-) ISC. Thus, the PC phenotype of CD38(+) cells generated in vitro did not correlate with PC function. To address this, we have examined cultures of activated memory B cells to accurately identify the phenotype of ISC generated in vitro. We found that CD27 is also up-regulated on memory B cells in an IL-10-dependent and division-dependent manner, and that ISC segregated into the CD27(high) subset of activated memory B cells irrespective of the acquired expression of CD38. The ISC generated in these cultures expressed elevated levels of the transcription factors Blimp-1 and X box-binding protein-1 and reduced levels of Pax-5, and exhibited selective migration toward CXCL12, similar to primary PC. We propose that the differentiation of memory B cells into PC involves a transitional stage characterized by a CD27(high)CD38(-) phenotype with the acquired ability to secrete high levels of Ig.