B lymphocytes originate from pluripotential haematopoietic stem cells and differentiate into immunoglobulin (Ig)-producing cells. B-cell lineage differentiation is accompanied by two types of immunoglobulin gene rearrangements--rearrangement of V, D and J gene segments to create a functional V gene and rearrangement of CH genes for heavy-chain switching. These results, however, have been obtained mainly by analysis of immunoglobulin gene organization of myeloma cells. Baltimore and his colleagues have established Abelson murine leukaemia virus (A-MuLV)-transformed cell lines and found a few lines capable of carrying out kappa-gene rearrangement or undergoing isotype switching during in vitro culture. To study early B-cell lineage differentiation events, we have now also established A-MuLV-transformed cell lines which are capable of differentiating from mu- to mu+ and of undergoing continuing rearrangement of heavy-chain genes in culture. Analysis of immunoglobulin gene organization of these transformed cells revealed that mu- cells have already undergone DNA rearrangements involving JH segments but an additional rearrangement of JH segments is required for initiation of mu-chain synthesis. Southern blot analysis of the DNA and two-dimensional gel electrophoresis of intracytoplasmic mu-chain show that mu-chain diversity with respect to antigen specificity may be generated during this second rearrangement process. As no rearrangement of light-chain genes takes place in these cells, this implies that light-chain gene rearrangement requires some further change, or a different enzyme.