In order to study the regulation of expression of Ig lambda genes we have analyzed lambda-producing hybridomas derived from transgenic mice which harbor a functionally rearranged kappa transgene. We also analyzed lambda-producing hybridomas from nontransgenic mice. Surprisingly, all but one of the transgenic lambda-hybridomas co-produce kappa L chains. Also, in contrast to transgenic kappa-hybridomas, most lambda-hybridomas have rearranged endogenous kappa genes despite the presence of transgenic kappa-chains and endogenous H chains. Analysis of spleen cells and hybridomas from nontransgenic mice shows that about 20% of lambda-producing B cells in the spleen co-produce kappa, and a similar proportion of lambda-hybridomas from normal spleens produce both kappa- and lambda-chains. The data argue strongly against the strictly sequential expression of kappa and lambda genes. We present a new model for the regulation of kappa and lambda gene expression, whose key feature is the distinction between a kappa cell lineage in which Ig gene rearrangement is susceptible to feedback by a complete antibody molecule at the pre-B cell stage, and a kappa lambda B cell lineage which does not show feedback inhibition during B cell development.