The passage of dendritic cells (DC) from immature to terminally differentiated antigen-presenting cells is accompanied by numerous morphological, phenotypic, and functional changes. These changes include, for example, expression of "empty" class II MHC proteins (MHCII) at the surface in immature DC, whereas a much larger amount of peptide-loaded MHCII is expressed at the surface in mature DC. Here we show that, in cultured immature DC derived from murine bone-marrow precursors, a number of molecules involved in intracellular trafficking were present in a cleaved form, degraded by caspase-like proteases. Cleavage was either inhibited or reduced significantly during maturation of DC induced by either LPS and TNF-alpha or by peptides that inhibit caspase activities. Inducible nitric oxide (NO) synthetase up-regulated by LPS was essential for inhibiting the caspase-like activity during the maturation of DC. Moreover, treatment with LPS or caspase inhibitor resulted in expression of MHCII/peptide complexes at the cell surface. Thus, the alteration of the endosomal trafficking pathways during the development of DC that parallels the changes in surface expression of MHCII is regulated at least in part by the activities of caspases, inducible NO synthetase, and its product NO.