The B-cell receptor (BCR) for antigen is composed of surface immunoglobulin (sIg), which provides antigen specificity, and a noncovalently associated signaling unit, the CD79a/b heterodimer. Defects in CD79 can influence both BCR expression and signaling and may explain why cells from certain malignancies, such as B-chronic lymphocytic leukemia (B-CLL), often express diminished and inactive BCR. Recently, an alternative transcript of CD79b (DeltaCD79b) has been reported that is up-regulated in B-CLL and may explain this diminished BCR expression. Here we assess the expression of DeltaCD79b in B-CLL and other lymphoid malignancies and investigate its function. High relative expression of DeltaCD79b was confirmed in most cases of B-CLL and found in 6 of 6 cases of splenic lymphomas with villous lymphocytes (SLVLs) and hairy cell leukemia. In a range of Burkitt lymphoma cell lines, expression of DeltaCD79b was relatively low but correlated inversely with the ability of the BCR to signal apoptosis when cross-linked by antibody (Ab). Interestingly, when Ramos-EHRB cells, which express low DeltaCD79b, were transfected with this transcript, they were transformed from being sensitive to anti-Fcmu-induced apoptosis to being highly resistant. Although DeltaCD79b was expressed as protein, its overexpression did not reduce the level of cell surface BCR. Finally, we showed that the inhibitory activity of DeltaCD79b depended on an intact leader sequence to ensure endoplasmic reticulum (ER) trafficking and a functional signaling immunoreceptor tyrosine-based activation motif (ITAM) in its cytoplasmic tail. These results point to DeltaCD79b being a powerful modulator of BCR signaling that may play an important role in normal and malignant B cells.