It has been proposed that invariant chain (Ii), a nonpolymorphic, transmembrane glycoprotein found in noncovalent association with Ia molecules, may function to protect the Ia Ag-binding site from association with self-peptides during Ia synthesis. Selective binding of foreign antigenic peptides could then be allowed by the dissociation of Ii molecules from Ia in the appropriate intracellular compartment. In this study, we have examined the structure and intracellular trafficking patterns of a putative proteolytic product of Ii, p25. We found that p25 is a non-membrane-bound fragment of Ii with an N terminus beginning at Met98 of the Ii sequence. p25 is formed at a very early stage of Ii synthesis in the rough endoplasmic reticulum rather than in a post-Golgi Ag-processing compartment. We have also characterized a second Ii-related species, p28, which has not been reported previously. The p28 form of Ii, unlike p25, is generated under acidic conditions similar to those found during Ag processing.