Advances in molecular immunology over the past two decades permit a better understanding of why antibodies develop to peptide antigens like factor VIII and the events that lead to the development of these antibodies. Two important variables that are critical in antibody formation are (i) the molecular defect in FVIII and the consequences of that defect on translation and protein production, and (ii) the major histocompatibility complex (MHC) molecules which bind specific peptide sequences and present those peptides to CD4 T lymphocytes to initiate the cellular cascade leading to B-cell stimulation and differentiation, and ultimately to antibody formation. Inhibitors develop in hemophilia because transfused FVIII can be seen as a foreign protein and elicits an immune response in much the same way that any other foreign protein might elicit an immune response. However, not all hemophiliacs generate an immune response, either because they do not recognize FVIII as foreign or because their MHC phenotype is such that a cellular immune response is not initiated. In this model, it is the combination of molecular defect and MHC phenotype that determines inhibitor formation. The interplay of these two variables in the context of why some but not all hemophiliacs develop antibodies after treatment with replacement factor is reviewed.