The differentiation status of Sternberg-Reed (SR) cells is still not well defined, primarily because of their scarcity in tumor biopsies of Hodgkin's disease (HD). In this study we have determined the genomic differentiation status of SR cells by quantitation of recombinase activating gene (RAG) expression. RAG genes are selectively transcribed in immature lymphoid cells. In B cells they are silent after genomic rearrangement has occurred, whereas in T cells they are downregulated during positive selection of double-positive thymocytes into single- positive cells. RNA from tumor biopsies either with numerous (11 cases) or a with few SR cells (16 cases) was assessed by a sensitive reverse transcriptase polymerase chain reaction (RT-PCR) and the results compared with established positive and negative controls. In all except two cases levels of RAG expression were within the range of those determined in negative controls. In both positive cases and in the positive control RAG mRNA was further quantitated by competitive PCR. In cases with abundant SR cells RAG expression was still below that observed in 10(-2) dilutions of positive controls. These results suggest that SR cells are derived from lymphoid cells, more differentiated than the pre-B or common thymocyte stage, which have already undergone genomic rearrangement. They show the value of assessing RAG expression by RT-PCR in the characterization of lymphoid malignancies.