Oct-2, a POU homeo domain transcription factor, is believed to stimulate B-cell-restricted expression of immunoglobulin genes through binding sites in immunoglobulin gene promoters and enhancers. To determine whether Oct-2 is required for B-cell development or function, or has other developmental roles, the gene was disrupted by homologous recombination. Oct-2-l- mice develop normally but die within hours of birth for undetermined reasons. Mutants contain normal numbers of B-cell precursors but are somewhat deficient in IgM+ B cells. These B cells have a marked defect in their capacity to secrete immunoglobulin upon mitogenic stimulation in vitro. Thus, Oct-2 is not required for the generation of immunoglobulin-bearing B cells but is crucial for their maturation to immunoglobulin-secreting cells and for another undetermined organismal function.