Human myeloid progenitor cells temporarily express HLA class II molecules during the differentiation pathway to granulocytes and macrophages. The significance of major histocompatibility complex (MHC) class II molecules at this stage of development is unknown. As a first stop of inquiry into their function, we have characterized the profile of major self-peptides bound to the HLA-DR molecules expressed by KG-1 cells, a line that shares many of the phenotypic characteristics of colony-forming unit-granulocyte-macrophage progenitors. Searches of protein data bases showed that all matching peptides bound to the HLA-DR molecules of KG-1 cells corresponded to intracellular, rather than exogenous or transmembrane, precursor proteins. Because the absence of a conventional self-peptide repertoire could be related to altered trafficking of class II molecules, the biosynthesis of HLA-DR and the invariant chain proteins was determined. The MHC class II associated invariant chain protein is synthesized normally in KG-1 cells, but processed fragments of invariant chain, class II-associated invariant chain peptides (CLIPs), occupy the antigen-binding groove of KG-1 class II molecules at a much lower frequency compared with that of mature antigen-presenting cells. Low CLIP occupancy of HLA-DR is a characteristic shared by KG-1 cells, normal CD34+ progenitor cells, and HLA-DR+ breast carcinoma cells. The unusual profile of MHC class II bound peptides and the low level of CLIP bound to HLA-DR suggest that the antigen-processing pathway of KG-1 is different from that characterized in professional antigen-presenting cells and that exogenous antigen-processing may be a developmentally acquired characteristic in the myeloid lineage.