In this study we show that the ability of bone marrow pre-B cells to differentiate into B cells in H/L chain transgenic scid mice correlates with the ability of the transgenes to inhibit initiation of endogenous kappa gene rearrangement. Initiation of rearrangement was scored by assaying for DNA double-strand breaks (DSB) at the recombination signal/coding borders of J kappa 1 and J kappa 2. In H/L chain transgenic scid mice that develop B cells, we found little or no DSB; whereas in H chain only transgenic scid mice, in which pre-B cells are unable to give rise to B cells, we found a normal level of DSB but no VJ kappa coding joints. As scid mice are deficient in the repair of DSB, we suggest that initiation of kappa gene rearrangement in H chain transgenic scid mice causes B lineage cells to die at the late pre-B stage. In one transgenic scid line (Y-Sp6), which falls to generate B cells despite containing a H and L chain transgene, we found evidence for loss of B lineage cells at two stages of development: the pro-B to pre-B transitional stage and the late pre-B stage.