A murine monoclonal antibody, anti-HC2, which reacts with hairy cell leukemia cells, was used to define the normal cell equivalent for the leukemic hairy cell. This antibody stained the membranes of 2.24% of normal peripheral blood lymphocytes. These cells were more common in T cell-depleted cell populations, and bore membrane immunoglobulin. Some B lymphoblastoid cell lines were also anti-HC2-positive. Examination of normal B cell subpopulations revealed that HC2-positive cells frequently co-express an activation antigen and membrane IgG. Cell populations enriched for HC2-positive cells contained the bulk of PWM-responsive B cells. These data suggest that HC2-bearing B cells are activated B cells. B cell differentiation induced in vitro by PWM with T cell helper factors resulted in an increase in the number of HC2-positive cells at day 4 or 5 of culture. The HC2-positive cells were no longer present at the time of maximal plasma cell differentiation on day 7 of culture. By using B cells from a patient with the hyper-IgM syndrome that are incapable of immunoglobulin heavy chain class switching, it was demonstrated that HC2 expression did not require prior heavy chain switch. The m.w. of the HC2 antigen was 52 to 63 KD. Four bands with different isoelectric points were discerned on two-dimensional analysis. We suggest that hairy cell leukemia represents a malignancy of activated B cells. A unique stage of B cell differentiation is identified by the HC2 activation antigen.