Generation of diversified immunoglobulin (Ig) and T cell receptor (TCR) repertoires through V(D)J recombination is the foundation of adaptive immunity. For immunoglobulin heavy chain (IgH) gene, the step of VH to DJH rearrangement occurs exclusively in B lineage cells. Accumulating studies indicate that Pax5 (BSAP), a B lineage specific transcription factor, plays an important role in the regulation of B lineage specific VH to DJH recombination. In Pax5-/- mice, the recombination of upstream VH558 genes is severely impeded. Conversely, ectopic expression of Pax5 transgenes in early thymocytes initiates VH7183 to DJH recombination. Pax5 is essential for IgH locus contraction and histone hypo-methylation across the IgH locus prior to V(D)J recombination. We found that Pax5 associates with the VH gene coding regions and interacts with the RAG1 and RAG2 protein complexes to enhance RAG-mediated VH to DJH recombination. Based on our results, we proposed a novel experimental model that Pax5 directly transactivates RAG-mediated VH to DJH recombination.