To examine the role of the TNF-R superfamily signaling protein TRAF2 in mature B cell development and NF-κB activation, conditionally TRAF2-deficient mice were produced. B cells lacking TRAF2 expression in these mice possessed a selective survival advantage, accumulated in the lymph nodes and splenic marginal zone, were larger in size, and expressed increased levels of CD21/35. These TRAF2-deficient B cells could not proliferate or activate the canonical NF-κB pathway in response to CD40 ligation. By contrast, noncanonical NF-κB activation was constitutively hyperactive, with TRAF2-deficient B cells exhibiting close to maximal processing of NF-κB2 from p100 to p52 and high levels of constitutive p52 and RelB DNA binding activity. These findings establish TRAF2 as a multifunctional regulator of NF-κB activation that mediates activation of the canonical pathway but acts as a negative regulator of the noncanonical pathway. This dual functionality explains the contrasting roles of TRAF2 in B cell maturation and activation.