Human cord blood (CB) is a valuable source of hematopoietic stem cells, but clinical reports have indicated slow recovery of B-cell development and function after CB transplantation. To investigate the basis of these B-cell defects in reconstitution, we characterized B cells purified from CB. We compared B-cell receptor activation and B-cell subsets in CB, bone marrow (BM), and peripheral blood (PB). We found that in CB B cells activation of extracellular signal-regulated kinase (ERK) and p38 following ligation of CD40 but not of the B-cell antigen receptor (BCR) was inefficient. The patterns of expression of CD5, CD34, and CD40 in the B-cell population of CB were similar to those in PB rather than in BM. The B cells in CB contained an increased proportion of B cells expressing a high level of CD24 and a low proportion of B cells expressing CD27, pointing to the presence of circulating CD24high immature transitional and CD27(-) naive B cells. CD40-mediated activation of ERK and p38 was also minimal in these B cells of CB. These findings may account for the functional defects of B cells in transplanted CB.