Human leukocyte antigen (HLA)-DM is an unconventional major histocompatibility complex (MHC) class II heterodimer that is important for B-cell-mediated antigen processing and presentation to MHC class II-restricted T cells. HLA-DM is encoded by two genes, DMA and DMB, which map to the MHC class II region, and shares some homology with MHC class I and class II proteins. Here we define the biochemical role of HLA-DM. Recombinant soluble HLA-DM heterodimers have been purified from culture supernatants of insect cell transformants. At pH 5.0, they induce the dissociation of a subset of peptides bound to HLA-DR, including a nested set of class-II-associated invariant chain peptides (CLIP). This process liberates HLA-DR and leads to the enhanced binding of exogenous peptides.