Waldenstrom's macroglobulinemia (WM) has been hypothesized to be a pleomorphic B-cell malignancy with persistent maturation towards plasma cells in all lymphoid tissue. This proposal is based on detection of a heterogeneous density of monoclonal Ig on peripheral blood B-cells in patients with WM. We now present data derived from 2- and 3-color immunofluorescence and flow cytometric analysis that strongly supports this hypothesis. Abnormally high numbers of B lineage cells, defined by expression of CD19, CD20, and CD24, were found among peripheral blood mononuclear cells (PBMC). These B-cells are monoclonal as defined by light chain expression and by the existence of rearranged Ig genes (Southern blot analysis), although they exhibit heterogeneity in the density of surface light chain. Unlike normal PBMC B-cells, the monoclonal B-cells bear CD5 and CD10 (CALLA), express adhesion and adhesion-related molecules (CD11b, CD9), and appear to be actively differentiating during the course of the disease, based on the pattern of CD45 isoform expression. At any given point in time, the population of monoclonal B-cells is heterogeneous in differentiation stage based on transitions in the expression of CD45 isoforms from expression of CD45RA, the high molecular mass isoforms of CD45, to the low molecular mass isoform CD45R0 which appears only on very late stage B-cells and early plasma cells. For one patient, analysis of CD45 isoform expression over 2 years showed that the monoclonal B-cell population as a whole progressed towards terminal differentiation as defined by loss of CD45RA and acquisition of CD45R0. This indicates a continuously differentiating lineage of an unusual B-cell phenotype, and/or malignant transformation of a distinct lineage of B-cells in WM.