RAW264.7 cells were transfected to express constitutively the murine class II major histocompatibility complex (MHC-II) molecule, I-Ak. The resulting RAW.Ak cells presented HEL(46-61) peptide to 3A9 T hybridoma cells, but they were unable to process and present HEL protein in their resting state. However, IFN-gamma stimulation induced the ability of RAW.Ak to process and present HEL protein, with little effect on their ability to present HEL(46-61) peptide. Antigen catabolism showed little change with IFN-gamma stimulation, suggesting that the production of peptides was not the regulated step in the processing pathway. Furthermore, HEL(46-61) peptide delivered directly into lysosomes by acid-resistant liposomes was also presented only upon IFN-gamma stimulation, while the presentation of peptides delivered into endosomes by acid-sensitive liposomes showed a lesser dependence on IFN-gamma stimulation. Thus, IFN-gamma regulated the ability of peptides delivered into certain lysosomal compartments to meet with MHC-II molecules and form peptide-MHC complexes, or to transport subsequently to the plasma membrane. Two other antigens, ribonuclease A and haemoglobin, were processed by RAW.Ak cells without IFN-gamma stimulation, suggesting that these antigens could be processed by different mechanisms, perhaps in earlier endocytic compartments. Thus, different antigens may be processed in distinct endocytic compartments, and an IFN-gamma-regulated mechanism controls the rescue of peptides from lysosomal compartments for presentation at the plasma membrane.