Forkhead transcription factors are key participants in development and immune regulation. Here we demonstrate that absence of the gene encoding the forkhead transcription factor Foxp1 resulted in a profound defect in early B cell development. Foxp1 deficiency was associated with decreased expression of all B lineage genes in B220⁺ fetal liver cells as well as with a block in the transition from pro–B cell to pre–B cell involving diminished expression of recombination-activating genes 1 and 2. Foxp1 bound to the Erag enhancer and was involved in controlling variable-(diversity)-joining recombination of the gene encoding immunoglobulin heavy chain in a B cell lineage–specific way. Our results identify Foxp1 as an essential participant in the transcriptional regulatory network of B lymphopoiesis.