The induction of major histocompatibility complex (MHC) class II expression in the epithelium of the small intestine of the rat during graft-versus-host disease (GVHD) and the effect of this process on the capacity of isolated epithelial cells to present antigen has been investigated. By immunohistology, increased class II (I-A) was noted in lamina propria cells and villus epithelium and de novo expression in crypt epithelium by Day 7 after transfer of parental spleen cells into irradiated hybrid rats. This increased expression reached a maximum by Day 9 or 10. The kinetics of induction of I-E products paralleled those of I-A in villus epithelium, but I-E was not seen in crypt epithelium. Direct radioimmunoassay of class II in isolated villus and crypt epithelial cells revealed a minor peak of class II, particularly in villus cells, very soon after cell transfer which waned and then increased to a second peak at Days 7-9. Assay of presentation of ovalbumin by isolated enterocytes to primed T cells at the peak of class II induction showed that increased class II expression by villus cells mediated enhanced antigen-presenting activity, whereas increases in crypt cell class II did not enable these cells to present ovalbumin.