Many chronic infections, including malaria and HIV, are associated with a large expansion of CD21⁻CD27⁻ ‘atypical’ memory B cells (MBCs) that exhibit reduced B cell receptor (BCR) signaling and effector functions. Little is known about the conditions or transcriptional regulators driving atypical MBC differentiation. Here we show that atypical MBCs in malaria-exposed individuals highly express the transcription factor T-bet, and that T-bet expression correlates inversely with BCR signaling and skews toward IgG3 class switching. Moreover, a longitudinal analysis of a subset of children suggested a correlation between the incidence of febrile malaria and the expansion of T-bet^hi B cells. The Th1-cytokine containing supernatants of malaria-stimulated PBMCs plus BCR cross linking induced T-bet expression in naïve B cells that was abrogated by neutralizing IFN-γ or blocking the IFN-γ receptor on B cells. Accordingly, recombinant IFN-γ plus BCR cross-linking drove T-bet expression in peripheral and tonsillar B cells. Consistent with this, Th1-polarized Tfh (Tfh-1) cells more efficiently induced T-bet expression in naïve B cells. These data provide new insight into the mechanisms underlying atypical MBC differentiation.