Recent studies have suggested the involvement of bone marrow in the pathogenesis of rheumatoid arthritis (RA), in which proliferation of monocyte-lineage cells (MLC) as well as local B cell activation in the synovium play an important role. Here, we show that bone marrow-derived MLC have the capacity to activate human peripheral blood IgD- B cells. Bone marrow CD34+ cells from RA patients that had been stimulated with stem cell factor and GM-CSF for 3-4 weeks (>90% CD14+ HLA-DR+ cells, <0.5% CD19+ B cells, and <0.5% CD3+ T cells; MLC) induced the production of IgG much more effectively than that of IgM by highly purified B cells from healthy donors in the presence of IL-2 and IL-10. CD34+ cells from cord blood or from bone marrow of osteoarthritis patients also displayed the capacity to induce IgG production. The induction of IgG production by the bone marrow-derived MLC was markedly decreased when they were separated from B cells by a membrane filter. The bone marrow-derived MLC interacted preferentially with IgD- B cells to induce IgG production. These results indicate that upon stimulation with stem cell factor and GM-CSF, CD34+ progenitor cells differentiate into MLC that activate preferentially IgD- B cells through direct cellular interactions to produce IgG. Therefore, the data suggest that the accelerated recruitment of MLC from the bone marrow to the synovium might play a role in the local B cell activation in RA.