B cell development requires the ordered rearrangement of Ig genes encoding H and L chain proteins that assemble into BCRs or Abs capable of recognizing specific Ags. Igκ rearrangement is promoted by chromatin accessibility and by relative abundance of RAG1/2 proteins. Expression of the E26 transformation-specific transcription factor Spi-C is activated in response to dsDNA double-stranded breaks in small pre-B cells to negatively regulate pre-BCR signaling and Igκ rearrangement. However, it is not clear if Spi-C regulates Igκ rearrangement through transcription or by controlling RAG expression. In this study, we investigated the mechanism of Spi-C negative regulation of Igκ L chain rearrangement. Using an inducible expression system in a pre-B cell line, we found that Spi-C negatively regulated Igκ rearrangement, Igκ transcript levels, and Rag1 transcript levels. We found that Igκ and Rag1 transcript levels were increased in small pre-B cells from Spic−/− mice. In contrast, Igκ and Rag1 transcript levels were activated by PU.1 and were decreased in small pre-B cells from PU.1-deficient mice. Using chromatin immunoprecipitation analysis, we identified an interaction site for PU.1 and Spi-C located in the Rag1 promoter region. These results suggest that Spi-C and PU.1 counterregulate Igκ transcription and Rag1 transcription to effect Igκ recombination in small pre-B cells.