The recent discovery of two proteasome homologous genes, LMP2 and LMP7, in the class II region of the human MHC, has implicated this multi-subunit protease in an early step of the immune response; the degradation of intracellular and viral proteins. Short peptides produced by the proteasome are transported into the ER by the product of another set of MHC class II genes, TAP1 and TAP2, where they bind and stabilise HLA class I molecules. Antigenic peptides displayed at the cell surface by HLA class I molecules mark cells for destruction by cytotoxic T lymphocytes. The role of the proteasome in antigen processing was questioned when mutant cells, which lack the LMP genes, were able to process and present antigens normally. The discovery that two proteasome beta-subunits, delta and MB1, highly homologous to LMP2 and LMP7 and expressed in reciprocal manner, is now consistent with a role for the proteasome in antigen processing. The incorporation of different beta-subunits into the proteasome may be a mechanism to modulate catalytic activity of the proteasome complex, allowing production of peptides that are more suitable to enter into the ER by the TAP transporters and to bind HLA class I molecules. But, in the absence of the LMPs, the other subunits permit processing of most antigens reasonably efficiently.