MHC class II molecules display antigenic peptides on cell surfaces for recognition by CD4(+) T cells. Proteolysis is required in this process both for degradation of invariant chain (Ii) from class II-Ii complexes to allow subsequent binding of peptides, and for generation of the antigenic peptides. The cysteine endoprotease, cathepsin S, mediates Ii degradation in human and mouse antigen-presenting cells. Studies described here examine the functional significance of cathepsin S inhibition on antigen presentation and immunity. Specific inhibition of cathepsin S in A20 cells markedly impaired presentation of an ovalbumin epitope by interfering with class II-peptide binding, not by obstructing generation of the antigen. Administration of a cathepsin S inhibitor to mice in vivo selectively inhibited activity of cathepsin S in splenocytes, resulting in accumulation of a class II-associated Ii breakdown product, attenuation of class II-peptide complex formation, and inhibition of antigen presentation. Mice treated with inhibitor had an attenuated antibody response when immunized with ovalbumin but not the T cell-independent antigen TNP-Ficoll. In a mouse model of pulmonary hypersensitivity, treatment with the inhibitor also abrogated a rise in IgE titers and profoundly blocked eosinophilic infiltration in the lung. Thus, inhibition of cathepsin S in vivo alters Ii processing, antigen presentation, and immunity. These data identify selective inhibition of cysteine proteases as a potential therapeutic strategy for asthma and autoimmune disease processes.