Expression of stem cell antigen-1 (Ly-6A/E) is developmentally regulated in murine B cells. However, little is known about its modulation during B cell activation. We report here the differential regulation of Ly-6A/E expression in response to diverse activation signals in mature B cells. Stimulation of resting B cells through the antigen receptor (BCR) inhibited, Ly-6A/E surface expression in dose dependent manner. Activation induced downregulation of Ly-6A/E is specific to BCR mediated signaling events as stimulation of B cells with anti-CD40, lipopolysaccharide or interferon-gamma induced upregulation of Ly-6A/E surface expression. The activation induced differential modulation of Ly-6A/E expression is mediated at the mRNA levels. A role for BCR signaling in inhibition of Ly-6A/E expression was further confirmed using STAT-1(-/-) B cells, which expressed constitutive, but not inducible Ly-6A/E. The BCR induced inhibition of Ly-6A/E RNA and surface expression was mimicked by ionomycin, but not phorbol myristate acetate, indicating a role for calcium but not protein kinase C dependent signaling events. Inhibition of calcineurin reversed the BCR or ionomycin inhibited Ly-6A/E expression. Interestingly, in vitro differentiation analysis of Ly-6A/E(+) and Ly-6A/E(-) splenic B cells revealed the Ly-6A/E(+) cells to be the major source of antibody production, suggesting a potential role for Ly-6A/E in B cell differentiation. These studies provide the first evidence for activation induced differential modulation and differentiation of Ly-6A/E(+) B cells.