Phospholipase Cgamma2 (PLCgamma2) is a critical signaling effector of the B-cell receptor (BCR). Here we show that PLCgamma2 deficiency impedes early B-cell development, resulting in an increase of B220+ CD43+ BP-1+ CD24hi pre-BCR+ large pre-B cells. PLCgamma2 deficiency impairs pre-BCR-mediated functions, leading to enhanced interleukin-7 (IL-7) signaling and elevated levels of RAGs in the selected large pre-B cells. Consequently, PLCgamma2 deficiency renders large pre-B cells susceptible to transformation, resulting in dramatic acceleration of Myc-induced lymphomagenesis. PLCgamma2(-/-) Emu-Myc transgenic mice mainly develop lymphomas of B220+ CD43+ BP-1+ CD24hi pre-BCR+ large pre-B-cell origin, which are uncommon in wild-type Emu-Myc transgenics. Furthermore, lymphomas from PLCgamma2(-/-) Emu-Myc transgenic mice exhibited a loss of p27Kip1 and often displayed alterations in Arf or p53. Thus, PLCgamma2 plays an important role in pre-BCR-mediated early B-cell development, and its deficiency leads to markedly increased pools of the most at-risk large pre-B cells, which display hyperresponsiveness to IL-7 and express high levels of RAGs, making them prone to secondary mutations and Myc-induced malignancy.