F(ab')2 fragments of rabbit anti-mouse Ig induce proliferation of murine B lymphocytes, whereas the intact antibodies are not mitogenic. F(ab')2 anti-Ig stimulates the rapid breakdown of inositol phospholipids in B cells, resulting in the prolonged release of inositol (poly)phosphates and diacylglycerol. In marked contrast, intact anti-Ig initially induces a comparable response, which is abrogated after some 30 s. Blocking either the Fc receptors on the B cells or the Fc portion of the antibodies significantly reversed the inhibitory effect. On the other hand, both forms of anti-Ig elicited comparable increases in free cytoplasmic Ca2+ levels in B cells. These results therefore indicate that crosslinkage of Fc and surface Ig receptors on B cells inhibits inositol phospholipid breakdown (but not Ca2+ flux) resulting from ligation of the antigen receptors. Since there is evidence implicating inositol phospholipid breakdown in the induction of cell growth, this effect could provide a biochemical explanation for the known capacity of antigen-antibody complexes to inhibit B cell activation.