Germline C-H transcripts initiate from a promoter upstream of a non-coding I exon, proceed through the switch (S) region and terminate downstream of the associated C-H exons, To elucidate the role of germline transcription in Ig heavy chain class switch recombination (CSR), we used gene targeting in embryonic stem (ES) cells to replace most of the I(gamma)2b exon from immediately 3' of the majority of transcription initiation sites to beyond its donor splice site with a PGK-neo(r) gene inserted in the same transcriptional orientation as the endogenous unit. The mutation was introduced into both alleles of ES cell lines (referred to as I(gamma)2b(N/N)) and the neo(r) gene was deleted (referred to as I(gamma)2b(-/-)) by the loxP/Cre method, These mutations were assayed for effects on CSR in B cells derived via RAG-a-deficient blastocyst complementation. I(gamma)2b(-/-) B cells lacked ability to switch to IgG2b both in vivo and in vitro, and, correspondingly, showed no germline transcription through the I(gamma)2b exon, S(gamma)2b or the C(gamma)2b region, In contrast, I(gamma)2b(N/N) B cells switched at normal levels to IgG2b and showed substantial transcription through the S(gamma)2b and C(gamma)2b regions, Taken together, these results show that the I(gamma)2b sequences, per se, are not necessary for mediating CSR since a transcribed PGK-neo(r) gene can replace its function, However, the deleted portion of the I(gamma)2b exon and splice donor site apparently contain sequences necessary for efficient germline gene transcription and thus for CSR to IgG2b.