Early B-cell factor (EBF) is a cell type-specific transcription factor that is expressed at all antigen-independent stages of B-lymphocyte differentiation and participates in the regulation of the mb-1 gene. Here we show, by targeted gene disruption in mice, that EBF is necessary for the generation of immunoglobulin-expressing B cells. EBF-deficient mice lack B cells that have rearranged their immunoglobulin D and JH gene segments, but contain B220+CD43+ progenitor cells that express germline mu and IL-7 receptor transcripts. Various non-lymphoid tissues that express EBF are apparently normal in homozygous mutant mice, including olfactory neurons in which EBF was identified as Olf-1 (refs 5, 6). Together, these data suggest that EBF plays a specific and important role in the transcriptional control of B-cell differentiation at a stage before Ig (immunoglobulin) gene rearrangement but after commitment of cells to the B-lymphoid lineage.