The E26 transformation-specific (Ets) transcription factor PU.1 is required to generate lymphoid progenitor cells from hematopoietic stem cells, but it is not required to generate B cells from committed B-cell lineage progenitors. We hypothesized that PU.1 function in B-cell differentiation is complemented by the related Ets transcription factor Spi-B. To test this hypothesis, mice were generated lacking both PU.1 and Spi-B in the B-cell lineage. Unlike mice lacking PU.1 or Spi-B, mice deficient in both PU.1 and Spi-B in the B-cell lineage had reduced frequencies of B cells as well as impaired B-cell differentiation. Strikingly, all PU.1 and Spi-B-deficient mice developed pre-B cell acute lymphoblastic leukemia before 30 weeks of age. Pre-B cells accumulated in the thymus resulting in massive thymic enlargement and dyspnea. These findings demonstrate that PU.1 and Spi-B are essential transcriptional regulators of B-cell differentiation as well as novel tumor suppressors in the B-cell lineage.