Presentation of a protein antigen to T cells generally requires that the antigen be enzymatically processed into an immunogenic peptide(s). The identification of a protease(s) and its mechanism of action in the proteolysis of such an antigen is therefore a primary goal in the study of antigen processing. We show here that insulin degrading enzyme (IDE), a neutral thiol metalloendoproteinase that is structurally non-homologous to the classical metallo, thiol, acid, or serine proteinases, is relatively specific in its proteolytic activity for insulin and digests human insulin (H(I)) into peptides that are presented by murine TA3 B cell antigen presenting cells (APCs) to HI/I-Ad-reactive T cells. These peptides are, however, not presented by fixed TA3 APCs. Anti-IDE mAbs, after their internalization by TA3 cells, significantly inhibit the presentation of H(I) by these APCs. Immunoblotting experiments demonstrate that this inhibition is mediated by the reactivity of these mAbs with a 110 kDa protein, the known M(r) of IDE. These data show that IDE is an endoproteinase that is involved in the processing of insulin and that this IDE-mediated proteolysis is necessary but not sufficient for the recognition of insulin by T cells. Furthermore, we demonstrate that reduction of the disulfide bonds of a pre-processed A-loop containing heterodimeric insulin peptide is required to further process insulin into a T cell epitope.