The B-cell receptor (BCR) for antigen is composed of surface immunoglobulin (sIg), which provides antigen specificity, and a noncovalently associated signaling unit, the CD79a/b heterodimer. Defects in CD79 can influence both BCR expression and signaling and may explain why cells from certain malignancies, such as B-chronic lymphocytic leukemia (B-CLL), often express diminished and inactive BCR. Recently, an alternative transcript of CD79b (⌬CD79b) has been reported that is up-regulated in B-CLL and may explain this diminished BCR expression. Here we assess the expression of ⌬CD79b in B-CLL and other lymphoid malignancies and investigate its function. High relative expression of ⌬CD79b was confirmed in most cases of B-CLL and found in 6 of 6 cases of splenic lymphomas with villous lymphocytes (SLVLs) and hairy cell leukemia. In a range of Burkitt lymphoma cell lines, expression of ⌬CD79b was relatively low but correlated inversely with the ability of the BCR to signal apoptosis when cross-linked by antibody (Ab). Interestingly, when Ramos-EHRB cells, which express low ⌬CD79b, were transfected with this transcript, they were transformed from being sensitive to anti-Fc-induced apoptosis to being highly resistant. Although ⌬CD79b was expressed as protein, its overexpression did not reduce the level of cell surface BCR. Finally, we showed that the inhibitory activity of ⌬CD79b depended on an intact leader sequence to ensure endoplasmic reticulum (ER) trafficking and a functional signaling immunoreceptor tyrosine-based activation motif (ITAM) in its cytoplasmic tail. These results point to ⌬CD79b being a powerful modulator of BCR signaling that may play an important role in normal and malignant B cells. (Blood. 2002;100:3068-3076)