Understanding the mechanism of immunological tolerance to self-antigens remains a fundamental problem in immunology. Transgenic mice carrying rearranged antigen-receptor genes have provided a window into the events involved in this process, by allowing the development and fate of antigen-specific lymphocytes to be followed in vivo. In the B-cell lineage, as in T cells, self-reactive cells have been found to undergo several distinct fates in vivo: they can be physically eliminated, functionally inactivated, or they can persist unchanged or become activated. As discussed in this review, direct visualization of the fate of self-reactive cells resolves one of the key issues in tolerance. Achieving a precise understanding of the cellular and molecular events leading to lymphocyte deletion, anergy, or activation nevertheless remains a challenge for the future.