Transformation of B-lineage precursors by the Abelson murine leukemia virus appears to arrest development at the pre-B stage. Abelson-transformed pre-B cell lines generally retain transcriptionally inactive, unrearranged immunoglobulin κ alleles. We demonstrate that nontransformed pre-B cells expanded from the mouse bone marrow efficiently transcribe unrearranged κ alleles. In addition, they contain activated complexes of the NF-κB/Rel transcription factor family, in contrast with their Abelson-transformed counterparts. Using conditionally transformed pre-B cell lines, we show that the v-abl viral transforming protein, a tyrosine kinase, blocks germ-line κ gene transcription and negatively regulates NF-κB/Rel activity. An active v- abl kinase specifically inhibits the NF-κB/Rel-dependent κ intron enhancer, which is implicated in promoting both transcription and rearrangement of the κ locus. v-abl inhibits the activated state of NF-κB/Rel complexes in a pre-B cell via a post-translational mechanism that results in increased stability of the inhibitory subunit IκBα. This analysis suggests a molecular pathway by which v-abl inhibits κ locus transcription and rearrangement.