To further characterize the function of the common acute lymphoblastic leukemia antigen (CALLA; CD10, neutral endopeptidase 24.11, NEP) in early lymphoid development, we have identified murine lymphoid progenitors expressing CD10/NEP and analyzed the effects of inhibiting the enzyme in in vitro assays of murine lymphoid differentiation. CD10/NEP transcripts and enzymatic activity were primarily restricted to the subpopulation of murine lymphoid progenitors, termed pro-B cells, which were isolated from bone marrow (BM) and modified Whitlock-Witte cultures and defined by coexpression of B220 and low levels of Thy-1. CD10/NEP transcripts and cell surface enzymatic activity were also detected in BM stromal cells known to support the development of B-lymphoid progenitors. In contrast, Abelson and H-ras transformed pre-B-cell lines were CD10/NEP- as were Thy-1-B220+ pre-B cells from BM and modified Whitlock-Witte cultures and Thy-1lowLin- (B220-Mac-1-GR-1-Ly-2/3-) uncommitted hematopoietic progenitors from BM. The expression of CD10/NEP on murine pro-B cells and BM stromal cells suggests a role for the enzyme in early B-cell ontogeny. In modified Whitlock-Witte cultures in which Thy-1lowLin- progenitors plated on BM stromal cells differentiate into Thy-1lowB220+ pro-B and Thy-1-B220+ pre-B cells, the addition of specific CD10/NEP inhibitors increased the number of lymphoid colonies at days 5 through 7 by 34% (P < .001). The results suggest that CD10/NEP participates in the regulation of the earliest stages of stromal cell-dependent B lymphopoiesis.