Stimulation of small, resting, splenic B cells with bacterial lipopolysaccharide (LPS) induces proliferation, differentiation to plasma cell formation, and the expression of immunoglobulin heavy chain (IgH). When this is combined with agents which crosslink surface Ig, differentiation and the induction of surface immunoglobulin are suppressed even though proliferation proceeds. We find that anti-mu antibodies suppresses Ig gene expression of transfected mu constructs, even if either the membrane or secretory segments have been deleted. We examined the effects of anti-mu treatment on the IgH enhancer (IgHE) attached to a heterologous test gene (CAT). Indeed the IgH enhancer alone was subject to anti-mu suppression, while the SV40 enhancer was insensitive. To determine what was responsible for suppression of enhancer function by anti-mu we examined nuclear extracts from stimulated splenic B cells for the presence of sequence-specific DNA binding activities to various sites within the enhancer. We found two specific differences--an induction in mu E5 binding activity, and a reduction in octamer transcription factor 2 (OTF2) binding activity, after anti-mu treatment. Analysis of these cells by in situ immunofluorescence with anti-OTF2 antibodies suggests that the nuclear localization of OTF2 in anti-mu treated cells may change, as well as its absolute level.