To reconcile conflicting reports on the role of CD40 signaling in germinal center (GC) formation, we examined the earliest stages of murine GC B cell differentiation. Peri-follicular GC precursors first expressed intermediate levels of BCL6 while co-expressing the transcription factors RelB and IRF4, the latter known to repress Bcl6 transcription. Transition of GC precursors to the BCL6(hi) follicular state was associated with cell division, although the number of required cell divisions was immunogen dose dependent. Potentiating T cell help or CD40 signaling in these GC precursors actively repressed GC B cell maturation and diverted their fate towards plasmablast differentiation, whereas depletion of CD4(+) T cells promoted this initial transition. Thus while CD40 signaling in B cells is necessary to generate the immediate precursors of GC B cells, transition to the BCL6(hi) follicular state is promoted by a regional and transient diminution of T cell help.