Precursors to major histocompatibility complex (MHC) class I-presented peptides with extra NH2-terminal residues can be efficiently trimmed to mature epitopes in the endoplasmic reticulum (ER). Here, we purified from liver microsomes a lumenal, soluble aminopeptidase that removes NH2-terminal residues from many antigenic precursors. It was identified as a metallopeptidase named "adipocyte-derived leucine" or "puromycin-insensitive leucine-specific" aminopeptidase. However, because we localized it to the ER, we propose it be renamed ER-aminopeptidase 1 (ERAP1). ERAP1 is inhibited by agents that block precursor trimming in ER vesicles and although it trimmed NH2-extended precursors, it spared presented peptides of 8 amino acid and less. Like other proteins involved in antigen presentation, ERAP1 is induced by interferon-gamma. When overexpressed in vivo, we found that ERAP1 stimulates the processing and presentation of an antigenic precursor in the ER.