ΔBAFF is a novel splicing isoform of the regulator B cell-activating factor (BAFF, BLyS), a TNF family protein with powerful immunoregulatory effects. Overexpression of BAFF leads to excessive B cell accumulation, activation, autoantibodies, and lupus-like disease, whereas an absence of BAFF causes peripheral B cell immunodeficiency. Based on the ability of ΔBAFF to multimerize with full-length BAFF and to limit BAFF proteolytic shedding from the cell surface, we previously proposed a role for ΔBAFF in restraining the effects of BAFF and in regulating B lymphocyte homeostasis. To test these ideas we generated mice transgenic for ΔBAFF under the control of human CD68 regulatory elements, which target expression to myeloid and dendritic cells. We also generated in parallel BAFF transgenic mice using the same expression elements. Analysis of the transgenic mice revealed that ΔBAFF and BAFF had opposing effects on B cell survival and marginal zone B cell numbers. ΔBAFF transgenic mice had reduced B cell numbers and T cell-dependent Ab responses, but normal preimmune serum Ig levels. In contrast, BAFF transgenic mice had extraordinarily elevated Ig levels and increases in subsets of B cells. Unexpectedly, both BAFF and ΔBAFF appeared to modulate the numbers of B-1 phenotype B cells.