Class I major histocompatibility complex (MHC) molecules present antigenic peptides of cytoplasmic origin to T cells. As the lengths of these peptides seem restricted to eight or nine amino acids, an unusual proteolytic system must play a role in antigen processing. Proteasomes, a major extralysosomal proteolytic system, are responsible for the degradation of cytoplasmic proteins. We demonstrate that several proteasomal subunits, including MHC-encoded subunits, are regulated by interferon gamma. These data and the finding that MHC-encoded and other interferon gamma-regulated proteasomal subunits are uniquely associated with proteasomes strongly suggest that the immune system has recruited proteasomes for antigen processing.