Allelic exclusion of Ig gene expression is necessary to limit the number of functional receptors to one per B cell. The mechanism underlying allelic exclusion is unknown. Because germline transcription of Ig and TCR loci is tightly correlated with rearrangement, we created two novel knock-in mice that report transcriptional activity of the Jkappa germline promoters in the Igkappa locus. Analysis of these mice revealed that germline transcription is biallelic and occurs in all pre-B cells. Moreover, we found that the two germline promoters in this region are not equivalent but that the distal promoter accounts for the vast majority of observed germline transcript in pre-B cells while the activity of the proximal promoter increases later in development. Allelic exclusion of the Igkappa locus thus occurs at the level of rearrangement, but not germline transcription.