B cell activation following antigen receptor cross-linking can be augmented in vitro by ligation of cell surface CD22, which associates with the SHP1 protein tyrosine phosphatase. The targeted deletion of CD22 in mice demonstrated that CD22 differentially regulates antigen receptor signaling in resting and antigen-stimulated B lymphocytes. B cells from CD22-deficient mice exhibited the cell surface phenotype and augmented intracellular calcium responses characteristic of chronically stimulated B cells, as occurs in SHP1-defective mice. Thus, CD22 negatively regulates antigen receptor signaling in the absence of antigen. However, activation of CD22-deficient B lymphocytes by prolonged IgM cross-linking resulted in modest B cell proliferation, demonstrating that CD22 positively regulates antigen receptor signaling in the presence of antigen.