The presence of valine-154 instead of glycine in the constant region of lambda1 causes a severe lambda1 B cell defect in SJL and lambda1-valine knock-in mice with a compensatory increase in lambda2,3 B cells. The defect is due to low signaling by the lambda1-valine BCR. lambda1-Valine B cells deficient in the SHP-1 phosphatase survive better than lambda2,3 B cells in these mice, or lambda1 B cells in lambda1 wildtype mice. Low signaling is apparently due to misfolding of the lambda1-valine light chain as demonstrated by the absence of a regular beta-sheet structure determined by circular dichroism, the sedimentation of the light chain in solution, and the association of valine-valine constant regions in a yeast two-hybrid assay. lambda1-Valine B cells that survive apparently have a higher BCR signal, presumably because of their specific lambda1-heavy chain combination or having encountered a high-affiniy antigen. lambda1-Valine mice have increased B1 cells which were shown by others to have a higher signaling potential. Valine mice crossed with non-conventional gamma2b transgenic mice, in which B cell development is accelerated and in which B1 cells and high signaling cells are greatly reduced, have essentially no, lambda2,3 B cells, but increased numbers of lambda1-valine B cells. This supports the conclusion that the major defect in lambda1-valine mice is the inability of valine-preB cells to produce a threshold signal for B cell development. The reduction of lambda2,3 B cells in valine mice with a gamma2b transgene shows that the majority of their compensatory increase is almost entirely of the B1 cell type.