During exocytosis of MHC class II, the class II alpha beta heterodimer associates with a third polypeptide termed invariant chain (Ii). Class II and Ii are coordinately processed and transported until proteolytic cleavage of Ii in an acidic compartment immediately before class II surface expression. Although the lysosomotropic agent chloroquine (CQ) prevents dissociation of class II/Ii within the cell, the ultimate fate of these complexes has not been determined. We considered two alternative possibilities. If Ii encodes an intracellular retention signal, then persistent association of Ii with class II could lead to intracellular accumulation of class II/Ii complexes. Alternatively, if Ii does not block further transport of class II, then CQ treatment should result in aberrant expression of class II/Ii complexes at the cell surface. Ltk- and EL4 cells transfected with I-A(d) alone or I-A(d) plus Ii were treated with CQ and examined for changes in surface class II and Ii expression. Anti-Ii mAb surface staining did not increase with prolonged CQ treatment, but a dramatic decrease in surface class II staining was observed. This decrease in class II was observed both with genomic Ii and p31 cDNA transfectants and was rapidly reversed upon drug removal. Accumulation of Ii and class II within treated cells was directly observed by intracellular staining. Similar effects on MHC surface expression were observed with the lysosomotropic agents primaquine and NH4Cl and the cysteine protease inhibitor leupeptin. Ii-negative cells treated in parallel displayed no effect of the lysosomotropic agents or leupeptin on class II surface staining. These results indicate that dissociation of Ii from newly synthesized class II is required for transport of the alpha beta dimer to the cell surface, and suggest that Ii serves to retain class II molecules in a post-Golgi endocytic compartment.