We have resolved B220+ IgM- B-lineage cells in mouse bone marrow into four fractions based on differential cell surface expression of determinants recognized by S7 (leukosialin, CD43), BP-1, and 30F1 (heat stable antigen). Functional differences among these fractions can be correlated with Ig gene rearrangement status. The largest fraction, lacking S7, consists of pre-B cells whereas the others, expressing S7, include B lineage cells before pre-B. These S7+ fractions, provisionally termed Fr. A, Fr. B, and Fr. C, can differentiate in a stromal layer culture system. Phenotypic alteration during such culture suggests an ordering of these stages from Fr. A to Fr. B to Fr. C and thence to S7- pre-B cells. Using polymerase chain reaction amplification with pairs of oligonucleotide primers for regions 5' of JH1, DFL16.1, and Jk1, we find that the Ig genes of Fr. A are in germline configuration, whereas Fr. B and C are pro-B cell stages with increasing D-J rearrangement, but no V-D-J. Finally, functional analysis demonstrates that the proliferative response to IL-7, an early B lineage growth factor, is restricted to S7+ stages and, furthermore, that an additional, cell contact-mediated signal is essential for survival of Fr. A.