In Waldenstrom’s macroglobulinemia (WM), which locates primarily in the bone marrow (BM), VH gene analysis had previously suggested origins from a post-follicular B-cell arresting prior to isotype switch. Using more sensitive assays, facilitated by amplified cDNA from BM cells, nested PCR unexpectedly revealed tumor-derived isotype-switch transcripts in 7/7 cases. In 5/7 cases, both C and C variant transcripts were identified, and C or C only in 2/7. Detection of activation induced cytidine deaminase (AID) and germline and circle transcripts confirmed switching activity. Selected gene expression profiles established the memory B-cell marker CD27 as highly expressed in all cases. These findings were evaluated further in additional WM cases where availability of tumor material allowed detailed analysis. In 2/2 cases, phenotype suggested a variable CD27 expression within the tumor clone. In these, tumor IgM transcripts were readily detected in both the CD19+CD27+ and CD19+CD27– fractions, and in 1 of the 2 cases, post-switched tumor-derived C transcripts were also identified in each fraction. In this WM case, the frequency of tumor-derived transcripts was then assessed at the single cell level. Switch transcripts were identified in 3/96 cells with no co-expression of the IgM isotype. Similarly, AID transcripts were observed in some cells, not always correlating with switch events or with ongoing somatic mutation, which was apparent in VDJ-Cµ sequences. These findings reveal a dynamic intratumoral diversification, with AID activated and ongoing mutational and switch activity occurring post-transformation in a proportion of the tumor clone. Heterogeneity in CD27 expression is also evident within tumor cells, revealing phenotypic change. Interestingly, these data indicate that although WM tumor cells have arrested at the IgM stage and do not express isotype switched Ig, they retain the capacity to initiate events critical for isotype switch