B-less mice express a human immunoglobulin (Ig) lambda transgene that induces a severe deficiency of both immature pre-B and mature B lymphocytes. To understand this perturbation in B lymphopoiesis, we have devised a sensitive limiting dilution polymerase chain reaction assay that quantitates specific Ig rearrangements and thus quantitates B lineage cells at various stages of differentiation within unfractionated bone marrow. We find that there are significantly reduced frequencies of both VH-to-DJH and VK-to-JK rearrangements in the transgenic strain, whereas the frequency of D-to-JH rearrangements approximates that of wild type. Since Ig gene rearrangements occur in a stepwise fashion in which D-to-JH joining precedes that of VH-to-DJH and VK-to-JK, these results indicate that the major block of B lymphocyte development in the B-less strain occurs after D-to-JH rearrangement. Interestingly, sequence analysis of residual VHDJH junctions from transgenic pre-B lymphocytes reveals that an abnormally high proportion of these are out of frame and therefore nonproductive. Taken together, these data suggest that early expression of the transgenic lambda protein specifically prevents the development of a normal-sized population of precursor B lymphocytes coexpressing functional IgH. The transgene-induced immunodeficiency appears to arise by a precocious maturation process in which precursors bypass a developmental stage associated with cellular expansion.