The immunoproteasome, a distinct class of proteasome found predominantly in monocytes and lymphocytes, is known to shape the antigenic repertoire presented on class I major histocompatibility complexes (MHC-I). However, a specific role for the immunoproteasome in regulating other facets of immune responses has not been established. We describe here the characterization of PR-957, a selective inhibitor of low-molecular mass polypeptide-7 (LMP7, encoded by Psmb8), the chymotrypsin-like subunit of the immunoproteasome. PR-957 blocked presentation of LMP7-specific, MHC-I-restricted antigens in vitro and in vivo. Selective inhibition of LMP7 by PR-957 blocked production of interleukin-23 (IL-23) by activated monocytes and interferon-gamma and IL-2 by T cells. In mouse models of rheumatoid arthritis, PR-957 treatment reversed signs of disease and resulted in reductions in cellular infiltration, cytokine production and autoantibody levels. These studies reveal a unique role for LMP7 in controlling pathogenic immune responses and provide a therapeutic rationale for targeting LMP7 in autoimmune disorders.