Waldenstrom macroglobulinemia (WM) and its precursor IgM gammopathy are distinct disorders characterized by clonal mature IgM-expressing B-cell outgrowth in the bone marrow. Here, we show by high-dimensional single-cell immunogenomic profiling of patient samples that these disorders originate in the setting of global B-cell compartment alterations, characterized by expansion of genomically aberrant extrafollicular B cells of the nonmalignant clonotype. Alterations in the immune microenvironment preceding malignant clonal expansion include myeloid inflammation and naïve B- and T-cell depletion. Host response to these early lesions involves clone-specific T-cell immunity that may include MYD88 mutation-specific responses. Hematopoietic progenitors carry the oncogenic MYD88 mutations characteristic of the malignant WM clone. These data support a model for WM pathogenesis wherein oncogenic alterations and signaling in progenitors, myeloid inflammation, and global alterations in extrafollicular B cells create the milieu promoting extranodal pattern of growth in differentiated malignant cells. Significance:These data provide evidence that growth of the malignant clone in WM is preceded by expansion of extrafollicular B cells, myeloid inflammation, and immune dysfunction in the preneoplastic phase. These changes may be related in part to MYD88 oncogenic signaling in pre-B progenitor cells and suggest a novel model for WM pathogenesis. This article is highlighted in the In This Issue feature, p. 549.