Egr-1 (early growth response gene-1) is an immediate early gene encoding a zinc finger motif-containing transcription factor. Upon cross-linking of BCR, mature B cells undergo proliferation with an increase in Egr-1 message. Immature B lymphoma cells that express Egr-1 message and protein constitutively are growth inhibited when Egr-1 is down-regulated by negative signals from BCR or by antisense oligonucleotides. To test the hypothesis that Egr-1 is important for B cell development, we examined B cells from primary and secondary lymphoid organs in Egr-1(-/-) mice. Marginal zone B cell development was arrested in these mice, whereas the B cells in all other compartments were increased. To test the hypothesis that Egr-1 function may be partially compensated by other Egr family members, we developed transgenic mice expressing a dominant negative form of Egr-1, which lacks the trans activation domain but retains the DNA-binding domain, in a B cell-specific manner. There was a decrease in B lymphopoiesis in the bone marrow accompanied by a reduction in splenic immature and mature B cells as well as marginal zone B cells in the transgenic mice. Moreover, transgenic mice respond poorly to BCR cross-linking in vitro and T-independent and T-dependent Ags in vivo.