Exogenous protein Ag are processed within endocytic compartments to produce peptides that bind to class II MHC (MHC-II) molecules for presentation to T cells. We have now identified a subcellular compartment in which immunogenic peptides bind to MHC-II as a subset of high density lysosomes. Immunoelectron microscopy of whole cells and dense Percoll gradient subcellular fractions showed early tubulovesicular lysosomes with high levels of MHC-II. Typical mature lysosomes contained less MHC-II. Pulse-chase biosynthetic labeling of macrophages followed by immunoprecipitation of MHC-II from dense lysosomal fractions showed that MHC-II molecules targeted efficiently to lysosomes after biosynthesis. Moreover, lysosomal MHC-II molecules were rapidly loaded with immunogenic peptide (as detected by T cells) soon after exposure of macrophages to Ag and before similar expression of peptide-MHC-II complexes on the plasma membrane; this loading was blocked at 18 degrees C. We propose that nascent MHC-II molecules target to early tubulovesicular lysosomes and bind immunogenic peptides therein; the resulting peptide-MHC-II complexes are then transported to the plasma membrane.