MHC class II molecules assemble in the endoplasmic reticulum in a chaperone-mediated fashion to form a nine-chain structure consisting of three alpha beta dimers associated with an invariant chain trimer. This complex is transported through the Golgi apparatus and into the endosomal system. The signal for endosomal targeting resides in the cytoplasmic tail of the invariant chain. Current evidence argues that the segregation of the class II-invariant chain complex from the constitutive pathway of membrane protein transport occurs in the trans-Golgi network. However, class II-invariant chain complexes that reach the cell surface are also rapidly internalized into endosomes. Within the endosomal system, probably in a late endosome/pre-lysosome, the invariant chain is degraded, releasing alpha beta dimers that bind peptides predominantly derived from endocytosed proteins. Evidence suggests that many of these peptides are actually generated in lysosomes. The precise mechanisms involved in forming class II-peptide complexes are unclear, although the existence of antigen-processing mutants argues that additional gene products, at least one of which is encoded in the MHC, are involved. After binding peptides, class II molecules are transported by an unknown route to the cell surface, where their primary function of presenting antigenic peptides to CD4+ T cells is carried out.