Bone marrow stromal cells promote B cell development involving recombinase gene-directed rearrangement of the immunoglobulin genes. We observed that the stromal cell-derived cytokine interleukin 7 (IL-7) enhances the expression of CD19 molecules on progenitor B-lineage cells in human bone marrow samples and downregulates the expression of terminal deoxynucleotidyl transferase (TdT) and the recombinase-activating genes RAG-1 and RAG-2. Initiation of the TdT downregulation on the first day of treatment, CD 19 upregulation during the second day, and RAG-1 and RAG-2 downmodulation during the third day implied a cascade of IL-7 effects. While CD19 ligation by divalent antibodies had no direct effect on TdT or RAG gene expression, CD19 cross-linkage complete blocked the IL-7 downregulation of RAG expression without affecting the earlier TdT response. These results suggest that signals generated through CD19 and the IL-7 receptor could modulate immunoglobulin gene rearrangement and repertoire diversification during the early stages of B cell differentiation. © 1995, Rockefeller University Press., All rights reserved.