In pre-B lymphocytes, productive rearrangement of Ig light chain genes allows assembly of the B cell receptor (BCR), which selectively promotes further developmental maturation through poorly defined transmembrane signaling events. Using a novel in vitro system to study immune tolerance during development, we find that BCR reactivity to auto-antigen blocks this positive selection, preventing down-regulation of light chain gene recombination and promoting secondary light chain gene rearrangements that often alter BCR specificity, a process called receptor editing. Under these experimental conditions, self-antigen induces secondary light chain gene rearrangements in at least two-thirds of autoreactive immature B cells, but fails to accelerate cell death at this stage. These data suggest that in these cells the mechanism of immune tolerance is receptor selection rather than clonal selection.