To study the role of the murine heat-stable Ag (HSA) in lymphocyte maturation, we generated transgenic mice in which the HSA cDNA was under the transcriptional control of the TCR V beta promoter and Ig mu enhancer. The HSA transgene was expressed during all stages of B lymphocyte maturation. Expression was first detected in the earliest lymphoid-committed progenitors, which normally do not express HSA, and subsequently reached the highest levels in pro- and pre-B cells. In bone marrow, the number of IL-7-responsive clonogenic progenitors was < 4% of normal, whereas the frequency of earlier B lymphocyte-restricted precursors, detectable as Whitlock-Witte culture-initiating cells, was normal. Pro- and pre-B cells detected by flow cytometry were reduced by approximately 50% relative to controls. Mature splenic B cells were also reduced but to a lesser extent than in marrow, and their response to LPS stimulation was impaired. Reconstitution of SCID and BALB/c-nu/nu mice with HSA transgenic marrow indicated that the perturbations in B lymphopoiesis were not caused by a defective marrow microenvironment or by abnormal T cells. Our previous studies showed elevated HSA expression throughout thymocyte development, which resulted in a profound depletion of CD4+CD8+ double-positive and single-positive thymocytes. Together, these results indicate that HSA levels can determine the capacity of early T and B lymphoid progenitors to proliferate and survive. Therefore, HSA could serve as an important regulator during the early stages of B and T lymphopoiesis.