Phospholipase Cγ2 (PLCγ2) is a critical signaling effector of the B-cell receptor (BCR). Here we show that PLCγ2 deficiency impedes early B-cell development, resulting in an increase of B220⁺ CD43⁺ BP-1⁺ CD24^hi pre-BCR⁺ large pre-B cells. PLCγ2 deficiency impairs pre-BCR-mediated functions, leading to enhanced interleukin-7 (IL-7) signaling and elevated levels of RAGs in the selected large pre-B cells. Consequently, PLCγ2 deficiency renders large pre-B cells susceptible to transformation, resulting in dramatic acceleration of Myc-induced lymphomagenesis. PLCγ2^−/− Eμ-Myc transgenic mice mainly develop lymphomas of B220⁺ CD43⁺ BP-1⁺ CD24^hi pre-BCR⁺ large pre-B-cell origin, which are uncommon in wild-type Eμ-Myc transgenics. Furthermore, lymphomas from PLCγ2^−/− Eμ-Myc transgenic mice exhibited a loss of p27^Kip1 and often displayed alterations in Arf or p53. Thus, PLCγ2 plays an important role in pre-BCR-mediated early B-cell development, and its deficiency leads to markedly increased pools of the most at-risk large pre-B cells, which display hyperresponsiveness to IL-7 and express high levels of RAGs, making them prone to secondary mutations and Myc-induced malignancy.