Mechanisms of B cell tolerance act during development in the bone marrow and periphery to eliminate or restrict autoreactive clones to prevent autoimmune disease. B cells in the spleens of mice that harbor anti-insulin BCR transgenes (125Tg) are maintained in a functionally silenced or anergic state by endogenous hormone, but it is not clear when and where anergy is induced. An in vitro bone marrow culture system was therefore used to probe whether small protein hormones, a critical class of autoantigens, could interact with the BCR to induce anergy early during B cell development. Upon exposure to insulin, anti-insulin (125Tg) immature B cells show similar hallmarks of anergy as those observed in mature splenic B cells. These include BCR down-regulation, impaired proliferative responses to anti-CD40, and diminished calcium mobilization upon stimulation with BCR-dependent and independent stimuli. Inhibition of calcineurin also results in reduced immature B cell proliferation in a similar manner, suggesting a potential mechanism through which reduced intracellular calcium mobilization may be altering cellular proliferation. Signs of impairment appear after short-term exposure to insulin, which are reversible upon Ag withdrawal. This suggests that a high degree of functional plasticity is maintained at this stage and that constant Ag engagement is required to maintain functional inactivation. These findings indicate that tolerance observed in mature, splenic 125Tg B cells is initiated by insulin in the developing B cell compartment and thus highlight an important therapeutic window for the prevention of insulin autoimmunity.