Large multisubunit proteasomal complexes, catalyzing an extralysosomal, ATP-dependent pathway for selective degradation of unnecessary proteins, are thought to be responsible for major histocompatibility complex (MHC) class I-restricted antigen presentation. Two proteasomal polymorphic genes, LMP2 and LMP7, are localized within the MHC class II region, closely linked to the TAP1 and TAP2 genes that are responsible for the ATP-dependent, size- and sequence-selective transport of antigenic peptides generated in the cytoplasm into the endoplasmic reticulum. Interferon-gamma (IFN-gamma) alters the peptide-degrading specificity of proteasomes and appears to produce an immunoproteasome responsible for accelerated processing of nonself endogenous antigens by inducing the replacement of subunits X and Y by LMP7 and LMP2, respectively. This IFN-gamma-induced change in the subunits of proteasomes by IFN-gamma is a new mechanism for an immunomodulatory action, differing from that for marked increases of TAP transporter and MHC molecules, which are possibly due to changes in transcriptional levels in cells. Based on these findings, I propose alteration of the subunit assembly of proteasomes in response to extracellular stimuli as a novel mechanism for the acquisition of their functional diversity that plays a central role in the immune response.