Pax5 is indispensable for the commitment of early lymphoid progenitors to the B cell lineage as well as for the development of B cells. To better understand the functional importance of Pax5 at the later stages of B cell differentiation, we established a Pax5-deficient DT40 B cell line. The Pax5(-/-) cells exhibited slower growth, decreased surface IgM expression, and total loss of B cell receptor signaling. Moreover, the expression of the plasma cell-characteristic transcription factors Blimp-1 and XBP-1 were significantly upregulated and the expression of Bcl-6 diminished in the Pax5(-/-) cells, and this alteration was normalized by restored Pax5 expression. The Pax5-deficient cells further manifested substantially elevated secretion of IgM into the supernatant, another characteristic of plasma cells. These results indicate that downregulation of Pax5 function promotes the plasma cell differentiation of B cells.