Analysis of the early stages of avian B lymphocyte differentiation has been hampered by the low frequency of extra-bursal B lineage cells in sites of hematopoiesis. Consequently, little is known about B lineage precursors prior to their migration into the bursa of Fabricius. Colonization of the bursa typically occurs between about days 8 and 14 of embryonic (e) development, although cells which can colonize the bursa, functionally defined as pre-bursal stem cells, can be demonstrated in embryo bone marrow up until about the time of hatch. As a novel approach to analyzing early stages of avian B lymphocyte development, we show here that transformed B lineage cells can be derived from chick embryo bone marrow after infection in vitro with the replication-defective retrovirus REV-T produced in the context of the non-cytopathic CSV helper virus. Thus, exposure of day 14e-15e chick embryo bone marrow cells to REV-T (CSV) results in the generation of transformed, polyclonal lines of cells. From these lines, cells expressing cell surface immunoglobulin were readily isolated by flow cytometric cell sorting and single cell cloning. Analysis of the phenotype of REV-T(CSV)-transformed clones with a panel of monoclonal antibody reagents demonstrated that transformation by v-rel likely leads to marked changes in cell surface antigen expression. Nonetheless, clones expressing cell surface immunoglobulin expressed apparently normal mRNA for immunoglobulin mu and light chain and contained apparently normal immunoglobulin heavy and light chain gene rearrangements. Furthermore, no evidence for chromosomal deletions or aberrations of the Ig loci was detected among either sIg+ or sIg- REV-T(CSV)-transformed clones.