The expression of CD27 and CD44 correlate with the genotype of B-precursor acute lymphoblastic leukemia (ALL). Based on the expression of these antigens, we identified counterparts of TEL/AML1(pos) and TEL/AML1(neg) leukemic cells in nonmalignant bone marrow. Although CD27 is known as a marker of mature memory B cells, we recently showed that CD27 is also expressed by malignant and nonmalignant B precursors. Here, we show that CD27 and CD44 delineate stages of B-precursor development. Well-established differentiation markers showed that the developmental sequence starts from undetermined progenitors, expressing CD44. Upon B-lineage commitment, cells gain CD27 and lose CD44. The CD27(pos)CD44(neg) (CD27 single positive, 27SP) cells are the earliest stage within CD10(pos)CD19(pos) B precursors and express RAG-1 and TDT. These cells correspond to TEL/AML1(pos) ALL (1/4 pediatric B-precursor ALL). The development follows to CD27/CD44 double-positive (27/44DP) stage, 44SP stage and CD27/CD44 double-negative (27/44DN) stage. Before exit to periphery, CD44 is reexpressed. The 27/44DP cells are mostly large and profoundly suppress RAG-1. Despite their presumably high proliferation potential, 27/44DP cells rarely dominate in leukemia. At 44SP stage, which corresponds to TEL/AML1(neg) leukemias, RAG-1 is reexpressed and Ig light chain gene starts to be rearranged.