Gene knockout experiments in mice have suggested a hierarchical model of early B cell commitment wherein E2A proteins (E47 and E12) activate early B cell factor (Ebf1), which in turn activates expression of the B cell commitment factor, Pax5. In IL-7 receptor alpha (IL-7Rα) knockout mice, B cell development is blocked before B-lineage commitment at the prepro-B cell stage in adult animals. In IL-7Rα^−/− prepro-B cells, E47 is expressed and yet is insufficient to transcriptionally activate the putative downstream target gene, Ebf1. In this study, we show that further increases of E47 expression in IL-7Rα^−/− prepro-B cells fails to activate Ebf1, but rather leads to a dramatic induction of the E2A inhibitory factors, Id2 and Id3. In contrast, enforced expression of Ebf1 in IL-7Rα^−/− bone marrow potently down-regulates Id2 and Id3 mRNA expression and restores B cell differentiation in vivo. Down-regulation of both Id2 and Id3 during B cell specification is essential in that overexpression of either Id2 or Id3 in wild-type bone marrow blocks B cell specification at the prepro-B cell stage. Collectively, these studies suggest a model where Ebf1 induction specifies the B cell fate by dramatically increasing activity of E47 at the posttranslational level.