Rearranged immunoglobulin genes encoding either the secreted (microsecond) or membrane (micron) form of IgM were introduced into the mouse germ line. We report here the phenotypic analysis of lymphocyte populations in these mice (T microsecond and T micron). In T microsecond mice the transgenic mu chain is present in serum antibodies. The frequencies of B cells in the various B cell compartments of T microsecond mice are normal or slightly reduced compared to littermates. In T micron mice, however, B cell (but not T cell) development is severely affected. Spleens of 8-week-old T micron mice contain about 3%-8% B cells, increasing to approximately 20% at the age of 8 months. These cells express endogenous IgM. B cells expressing only transgenic micron chains are not detectable. In the bone marrow B cells are almost completely depleted. A B cell population characterized by reduced levels of IgD on the cell surface is enriched in the spleen and present at almost normal levels in the peritoneum of T micron mice.