N region diversity in Ag receptors is a developmentally regulated process in B and T cells that correlates with the differential expression of terminal deoxynucleotidyl transferase (TdT). Absent in fetal and newborn mice, TdT expression is restricted to early T and pro-B cells in adults. To extend the TdT expression pattern throughout B cell ontogenesis, we generated transgenic mice carrying a TdT cDNA under the regulatory elements of the N-myc gene and the IgH enhancer. High expression was observed in secondary lymphoid organs consistent with TdT activity beyond the pre-B cell stage. This suggests that TdT transgene expression is not down-regulated as is the endogenous gene. Unlike normal mice, extensive N region diversity was found in rearranged lambda light chain genes of adult transgenic animals. Therefore, expression of TdT appears sufficient for N region diversity to occur at any Ig locus. More importantly, expression of the transgene takes place during fetal development. As a consequence, the potential fetal B cell repertoire is modified as both rearranged heavy and light chain genes now show N region additions. Constitutive expression of TdT throughout B cell differentiation does not therefore appear deleterious and suggests that TdT is recruited only to participate in the V(D)J recombination process.