A number of presumptive target genes for the Ets-family transcription factor PU.1 have been identified in the B cell lineage. However, the precise function of PU.1 in B cells has not been studied because targeted null mutation of the PU.1 gene results in a block to lymphomyeloid development at an early developmental stage. In this study, we take advantage of recently developed PU.1−/−Spi-B−/− IL-7 and stromal cell-dependent progenitor B (pro-B) cell lines to analyze the function of PU.1 and Spi-B in B cell development. We show that contrary to previously published expectations, PU.1 and/or Spi-B are not required for Ig H chain (IgH) gene transcription in pro-B cells. In fact, PU.1−/−Spi-B−/− pro-B cells have increased levels of IgH transcription compared with wild-type pro-B cells. In addition, high levels of Igκ transcription are induced after IL-7 withdrawal of wild-type or PU.1−/−Spi-B−/− pro-B cells. In contrast, we found that Igλ transcription is reduced in PU.1−/−Spi-B−/− pro-B cells relative to wild-type pro-B cells after IL-7 withdrawal. These results suggest that Igλ, but not IgH or Igκ, transcription, is dependent on PU.1 and/or Spi-B. The PU.1−/−Spi-B−/− pro-B cells have other phenotypic changes relative to wild-type pro-B cells including increased proliferation, increased CD25 expression, decreased c-Kit expression, and decreased RAG-1 expression. Taken together, our observations suggest that reduction of PU.1 and/or Spi-B activity in pro-B cells promotes their differentiation to a stage intermediate between late pro-B cells and large pre-B cells.