The diversity of fetal immunoglobulins is normally very limited, in part due to the lack of terminal deoxynucleotidyl transferase (Tdt) expression and hence N sequence addition in developing B cells at this stage. Forced early Tdt expression should increase diversity and may alter the normal development of B cells. To examine this possibility, transgenic mice (19 lines altogether) have been generated for both splice variants of Tdt (TdtL and TdtS) under control of the VH81X Ig heavy chain promoter and the mu enhancer. Expression of each transgene in B cells can be clearly demonstrated by R.T-PCR in 18 of 19 lines and by staining with anti-Tdt Ab after LPS stimulation of adult splenocytes in 12 of 19 lines. Microscopy reveals nuclear localization of Tdt protein for both TdtL and TdtS. Nontransgenic littermate mice lack such expression with or without stimulation. In TdtS transgenic mice, there is a profound block in development of early B lineage cells. TdtS mice show a greater than 80% decrease in B220+mu+ cells in liver and spleen during perinatal life when compared to littermates or their TdtL counterparts. By day 7 after birth, the B220+mu+ population has recovered and differs in size only slightly between transgenic and littermate bone marrow, spleen, liver, blood and oeritoneal cavitv. Thus, exoression of TdtS in fetal life is detrimental to the development of early B cells.