Phenotypic analysis of bone marrow cells from IL-7 knockout (KO) mice revealed that B cell development is blocked precisely at the transition between pro-B cells and pre-B cells. In contrast, the generation of pre-pro-B cells and pro-B cells appeared to be normal, as judged by total cell numbers, proliferative indexes, D-JH and V-DJH gene rearrangements, and mRNA for recombinase-activating gene-1 (RAG-1), RAG-2, TdT, Igμ, λ5, and VpreB. However, upon closer inspection, several abnormalities in pro-B cell development were identified that could be corrected by injection of rIL-7 in vivo. These included the absence of the subset of late pro-B cells that initiates cμ expression for pre-B cell Ag receptor (BCR) formation, and the failure of pro-B cells to up-regulate TdT and the IL-7Rα (but not the common γ-chain) chain. Similar defects were present in common γ-chain and Jak3 KO mice, but not in λ5 or (excluding cytoplasmic Ig μ heavy chain (cμ)) RAG-1 KO mice, all of which also arrest at the late pro-B cell stage. Consequently, up-regulation of TdT and IL-7Rα expression requires signaling through the high affinity IL-7R, but does not require cμ expression or a functional pre-BCR. Taken together, these results suggest that IL-7 and its receptor complex are essential for 1) up-regulating the expression of TdT and IL-7Rα, 2) initiating the production of cμ, and 3) promoting the formation of a functional pre-BCR in/on pro-B cells. These key events, in turn, appear to be prerequisite both for differentiation of pro-B cells to pre-B cells and for proliferation of these cell subsets upon continued stimulation with IL-7.