Lineage commitment and differentiation to a mature cell type are considered to be unidirectional and irreversible processes under physiological conditions. The commitment of haematopoietic progenitors to the B-cell lineage and their development to mature B lymphocytes critically depend on the transcription factor encoded by the paired box gene 5 (Pax5). Here we show that conditional Pax5 deletion in mice allowed mature B cells from peripheral lymphoid organs to dedifferentiate in vivo back to early uncommitted progenitors in the bone marrow, which rescued T lymphopoiesis in the thymus of T-cell-deficient mice. These B-cell-derived T lymphocytes carried not only immunoglobulin heavy- and light-chain gene rearrangements but also participated as functional T cells in immune reactions. Mice lacking Pax5 in mature B cells also developed aggressive lymphomas, which were identified by their gene expression profile as progenitor cell tumours. Hence, the complete loss of Pax5 in late B cells could initiate lymphoma development and uncovered an extraordinary plasticity of mature peripheral B cells despite their advanced differentiation stage.