CD72 has been reported to regulate BCR-mediated signals both positively and negatively. SHP-1 and Grb2 bind, respectively, to ITIM1 and ITIM2 of CD72. We generated transformed B cell lines with an immature phenotype following J2 virus infection of splenocytes from CD72(-/-) and wild-type (Wt) mice. The transformed lines were infected with retroviral vectors carrying Tyr (Y) to Phe (F) substitutions in the ITIM sequences (ITIM1 mutated: Y7/F; ITIM2 mutated: Y39/F; and both ITIM mutated: Y7,39/F). Cross-linking of the BCR induced growth inhibition in transfectants expressing Wt CD72, but this response was less sensitive in transfectants with Y7,39/F. The Y7/F transfectants demonstrated the least sensitive response. We were not able to obtain transfectants with Y39/F, suggesting that CD72 associated with SHP-1, but not with Grb2, delivers a strong negative signal. Pre-ligation of CD72, which induces dephosphorylation of the molecule, partially rescued the Wt transfectants from growth inhibition, leading to a growth response profile similar to that of Y7,39/F transfectants. These results suggest that ITIM1/SHP-1 delivers a very strong negative signal that is down-modulated by signals through ITIM2/Grb2, leading to delivery of an attenuated negative signal. Thus, pre-ligation of CD72 results in the manifestation of an ostensible positive signal.