B cell development in RAG-2-deficient (RAG-2T) mice is impeded at an early stage, due to the inability of these animals to rearrange their endogenous ig gene loci. Expression of an E mu-bcl-2 transgene in these mice did not change this phenotype. However, stromal cell/IL-7-reactive B cell progenitors (pro-B cells) were found in fetal live and bone marrow of RAG-2T and RAG-2T/E mu-bcl-2 transgenic mice in numbers comparable to normal mice. Like cells from normal mice they are c-kit+, surrogate L chain+ and CD25-, and can proliferate in vitro for long periods of time. Upon IL-7 deprivation, they can be induced to differentiate into c-kit-, surrogate L chain- and CD25+ cells that are no longer clonable on stromal cells and IL-7. Furthermore, sterile transcription from the kappa L chain gene loci is induced. The latter was also observed with pro-B cells directly isolated ex vivo from the bone marrow of RAG-2-deficient animals. The results suggest that progenitor B cell differentiation can occur in cells from V(D)J recombinase-deficient mice to the stage where kL chain gene rearrangements would normally be initiated. It further indicates that some molecular programs of early B cell differentiation can take place in the absence of Ig gene rearrangements.