IL-21 plays a key role in the late stage of B cell development, where it has been shown to induce growth and differentiation of mature B cells into Ig-secreting plasma cells. Because IL-21R has also been reported on bone marrow (BM) B cell progenitors, we investigated whether IL-21R influenced earlier stages of B cell development. IL-21R is functional as early as the pro-B cell stage, and the strength of receptor-mediated signaling increases as cells mature. The addition of IL-21 to B cell progenitors in cell culture resulted in the accelerated appearance of mature B cell markers and was associated with the induction of Aid, Blimp1, and germline transcripts. We also found that stimulation of both IL-21R and CD40 was sufficient to induce the maturation of early B cell progenitors into IgM- and IgG-secreting cells. Consistent with a role for IL-21 in promoting B cell differentiation, the number of B220(+)CD43(+)IgM(-) pro-B cells was increased, and the number of mature IgM(hi)IgD(hi) cells was decreased in BM of IL-21R-deficient mice. We also report in this paper that IL-21 is expressed by BM CD4(+) T cells. These results provide evidence that IL-21R is functional in B cell progenitors and indicate that IL-21 regulates B cell development.