The Ets-1 transcription factor is essential for normal development of the natural killer and T cell lineages; however, its role in B cell development remains poorly understood. To address this issue, we used gene targeting to inactivate Ets-1 in mice (Ets-1(-/-)). We show here that the development of B cell precursors, particularly steps requiring pre-B cell receptor function, is defective in Ets-1(-/-) mice. Peripheral B cell subsets were analyzed in RAG2-deficient mice reconstituted with Ets-1(-/-) fetal liver cells. In such Ets-1(-/-) chimeric mice, B cell precursors develop into IgM/IgD-bearing cells, but B-1a cells as well as transitional-2 and marginal zone B cell subsets of the spleen are absent. In response to B cell receptor stimulation, Ets-1(-/-) splenic B cells fail to express the CD69 and CD25 activation markers. Furthermore, despite activation of ERK and JNK signaling pathways, Ets-1-deficient B cells do not proliferate and die following BCR engagement. These findings demonstrate that the effect of Ets-1 inactivation is not restricted to the terminal B cell differentiation stage, but also affects the development and function of earlier B cell subsets.