Experiments with transgenic mice carrying rearranged Ig transgenes have shown that membrane bound Ig molecules cause feedback inhibition of endogenous Ig gene rearrangement. However, this inhibition is never complete. It has been postulated that escape from feedback may be a property of the Ly-1 B cell subset, whereas rearrangement of endogenous Ig genes may be completely inhibited in conventional B cells. This possibility was investigated in transgenic mice carrying a lambda transgene under the control of the H chain enhancer. It was found that kappa producing B cells in these lambda transgenic mice were for the most part, although not exclusively, of the conventional B cell phenotype. Examination of peritoneal exudate cells revealed that a large proportion of Ly-1 B cells also express kappa. Adoptive transfer of bone marrow from adult lambda transgenic mice, a source of conventional B cell precursors, resulted in the production of relatively high levels of serum kappa 2 to 3 mo after transfer into recipient SCID mice. A high proportion of donor B cells in the spleen produced endogenous kappa protein with or without co-production of lambda. It is concluded that precursors of both conventional and Ly-1 B cells can escape feedback inhibition of L chain gene rearrangement.