In transgenic mice, self-reactive B lymphocytes are eliminated if they encounter membrane-bound self antigens during their development within the bone marrow. We show here that two separate and sequential events, arrested development and cell death, bring about B cell elimination. Developmental arrest is an early outcome of antigen binding in immature B cells, blocks acquisition of adhesion molecules and receptors important for B cell migration and activation, and is rapidly reversible by removal of antigen. Death of the arrested B cells occurs within 1 to 3 days and can be delayed by expression of a bcl-2 transgene, which results in escape of large numbers of self-reactive B cells from the bone marrow but fails to override the developmental arrest. These findings define a novel pathway for B cell elimination, involving an initial stage vulnerable to breakdown in autoimmune disease.