HLA-DO (H2-O in mice) is a nonpolymorphic transmembrane alphabeta heterodimer encoded in the class II region of the major histocompatibility complex (MHC). It is expressed selectively in B lymphocytes and thymic medullary epithelial cells. DO forms a stable complex with the peptide-loading catalyst HLA-DM in the endoplasmic reticulum (ER); in the absence of DM, DO is unstable. During intracellular transport and distribution in the endosomal compartments, the ratio of DO to DM changes. In primary B cells, only approx 50% of DM molecules are associated with DO. DO appears to regulate the peptide-loading function of DM in the MHC class II antigen-presentation pathway. Although certain discrepancies are present, results from most studies indicate that DO (as well as H2-O) inhibits DM (H2-M) function; this inhibition is pH-dependent. As a consequence, DO restrains presentation of exogenous antigens delivered through nonreceptor-mediated mechanisms; in addition, DO alters the peptide repertoire that is associated with cell-surface class II molecules. The biological function of DO remains obscure, partially because of the lack of striking phenotypes in the H2-O knockout mice. Results from recent studies indicate that DO expression in B cells is dynamic, and highly regulated during B-cell development and B-cell activation, suggesting that the physiological role of DO is to tailor the antigen presentation function of the B-lineage cells to meet their primary function at each stage of B-cell development and maturation. Further investigations are needed in this direction.