The human B cell restricted activation antigen B7 identifies an in vivo primed subpopulation of B cells that demonstrate an accelerated response to triggers of B cell activation and proliferation. The cDNA encoding B7 was molecularly cloned by cDNA expression. The identity of the B7 cDNA was confirmed by indirect immunofluorescence and immunoprecipitation of a 44/54-kDa protein from B7 transfected COS cells. The sequence of the B7 polypeptide predicts a type I membrane protein of 262 amino acids with eight potential N-linked glycosylation sites in the extracellular region and a short, highly positively charged cytoplasmic tail. The extracellular region is homologous to the Ig gene superfamily and consists of two contiguous Ig-like domains. The first Ig domain has the characteristics of a variable domain and the second that of a constant region domain. B7 mRNA was detected only on anti-Ig activated B lymphocytes and not in other hematopoietic cells. After in vitro activation of B cells with anti-Ig, B7 mRNA was maximally expressed between 4 and 12 h with four RNA transcripts of 1.7, 2.9, 4.2, and 10 kb. The 2.9-kb mRNA predominated in in vitro-activated B cells whereas the 1.7-kb mRNA was most abundant in tumor cells of B cell origin. B7 expression was confined to several histologically defined subgroups of B cell malignancies. The majority of non-Hodgkin's lymphomas were B7+ whereas the B cell leukemias and circulating non-Hodgkin's lymphomas were generally negative. These results demonstrate that the B7 gene encodes a unique molecule belonging to the Ig superfamily and that B7 expression is limited to normal activated B cells and noncirculating B cell malignancies.