Proteasomes are highly conserved macromolecular structures which function as endopeptidases. They are found in the cytoplasm and nucleus of eukaryotic tissues and consist of at least 14 non-identical subunits with molecular masses ranging from approximately 20 to 32K. Proteasomes are essential in the selective degradation of ubiquitinated and certain non-ubiquitinated proteins, acting as the proteolytic core of an energy-dependent 26S (1,500K) proteolytic complex. Two proteasome subunits, LMP2 and LMP7 (refs 4-7), are encoded within the major histocompatibility complex (MHC), implicating proteasomes in antigen processing. Here we determine the function of these two MHC-linked subunits by comparing the proteolytic activities of purified proteasomes containing (LMP+) or lacking (LMP-) these components. We find that proteasomes of both types have endopeptidase activity against substrates bearing hydrophobic, basic or acidic residues immediately preceding the cleavage site (the P1 position) and at sites following asparagine, glycine and proline residues. The activity of LMP+ proteasomes is much higher than that of LMP- proteasomes against substrates with hydrophobic, basic or asparagine residues at P1, whereas their activities are comparable when acidic and glycine residues are present at P1. The MHC-linked LMP2 and LMP7 subunits therefore function to amplify specific endopeptidase activities of the proteasome.