Infection with a recombinant murine-feline gammaretrovirus, MoFe2, or with the parent virus, Moloney murine leukemia virus, caused significant reduction in B-lymphoid differentiation of bone marrow at 2 to 8 weeks postinfection. The suppression was selective, in that myeloid potential was significantly increased by infection. Analysis of cell surface markers and immunoglobulin H gene rearrangements in an in vitro model demonstrated normal B-lymphoid differentiation after infection but significantly reduced viability of differentiating cells. This reduction in viability may confer a selective advantage on undifferentiated lymphoid progenitors in the bone marrow of gammaretrovirus-infected animals and thereby contribute to the establishment of a premalignant state.