.174xCEM.T2 (T2) is a human cell hybrid that has a large homozygous deletion within the MHC, including all of the functional class II genes. We have generated stable HLA-DR3 and H-2 I-Ak transfectants of T2 that express parental levels of class II molecules at the cell surface. T2.Ak transfectants fail to stimulate a hen egg lysozyme (HEL)-specific, I-Ak-restricted T cell when incubated with intact HEL. However, stimulation occurs if the appropriate HEL peptide is provided. The T2 cell line therefore has a defect in class II-restricted Ag processing. Biosynthetic studies demonstrate that the kinetics of I-Ak transport in T2.Ak are similar to the parental rates of transport, although the percentage of I-Ak molecules transported appears somewhat lower. I-Ak glycoproteins in T2.Ak associate normally with the I-chain, which appears to be proteolytically cleaved after transport through the Golgi apparatus in a similar fashion to that in the parent cell line, .174xCEM.T1 (T1). The DR alpha beta heterodimers in T2 differ from the parental phenotype in two ways. First, HLA-DR3 expressed in T2 does not have the epitope recognized by the DR3-specific mAb 16.23, although DR3 expressed in the parent does have the epitope. Second, the alpha beta subunits in the parent remain associated when exposed to SDS at room temperature, although those in T2 dissociate.