We have used Epstein-Barr virus (EBV) infection in vitro to delineate two distinct stages in B cell activation. Previous studies have shown that the BLAST-2 (EBVCS) (EBV cell surface) activation antigen is expressed on a small fraction of B cells within 24 h of stimulation with a variety of agents, including mitogens and EBV. In this study, we have been able to isolate the BLAST-2 (EBVCS)+ cells early after activation/infection with EBV. These cells are small B cells that are actively synthesizing RNA but not DNA, and are, therefore, clearly distinct from large proliferating lymphoblasts. In addition, they contain multiple copies of the EBV genome, express the viral nuclear antigen (EBNA) and, most importantly, proceed to undergo transformation when placed back in culture. By comparison, the BLAST-2 (EBVCS)- population does not undergo transformation, even though a fraction of these cells are activated for RNA synthesis and express EBNA. Thus, using the EBV system, we have been able to show directly that an activated B cell first expresses the BLAST-2 (EBVCS) antigen concomitant with an increase in RNA synthesis, and then subsequently proceeds to differentiate into a proliferating lymphoblast.