E12 and E47 are two helix-loop-helix transcription factors that arise by alternative splicing of the E2A gene. Both have been implicated in the regulation of immunoglobulin gene expression. We have now generated E2A (-/-) mice by gene targeting. E2A-null mutant mice fail to generate mature B cells. The arrest of B cell development occurs at an early stage, since no immunoglobulin DJ rearrangements can be detected in homozygous mutant mice. While immunoglobulin germline I mu RAG-1, mb-1, CD19, and lambda 5 transcripts are dramatically reduced in fetal livers of E2A (-/-) mice, B29 and mu degrees transcripts are present, but at lower levels. In addition, we show that Pax-5 transcripts are significantly reduced in fetal livers of E2A (-/-) mice. These data suggest a crucial role for E2A products as central regulators in early B cell differentiation.