Alpha beta T cells respond to complexes of peptide antigen and MHC molecules. The way in which protein antigens are transformed into peptides suitable for such binding and the intracellular pathways followed by MHC molecules both before and after peptide association are critical to our understanding of T cell immunity. We have used normal and gene transfected cells to examine these issues. Although class II molecules can assemble in the absence of invariant chain, the presence of this latter protein markedly augments proper class II formation in the ER. Following movement through the Golgi, invariant chain provides targeting signals that determine the subsequent movement of newly synthesized class II molecules to endocytic compartments. Our studies in transfected COS cells as well as using a combination of pulse-chase immunoprecipitation and gradient density organelle fractionation of B lymphoblasts have shown that early endosomes are the initial site of entry into the endosomal pathway, but that removal of invariant chain and significant amounts of peptide loading occur during or upon movement to late endosomes. Invariant chain has the capacity to alter the structure of early endosomes and change the rate of movement of endocytosed proteins through this early sorting compartment. Langerhans cells play a central role in initial antigen presentation to naive T cells, and our studies suggest that these cells overexpress invariant chain during upregulation of class II synthesis during maturation, creating a change in endosomal flow akin to that observe in our transfected fibroblast model. These studies better define the late intracellular path of class II and begin to localize the specific site(s) of antigen loading in the class II pathway.