MHC class II αβ dimers associate with the invariant chain (Ii) in the endoplasmic reticulum (ER), traffic through the Golgi apparatus and are delivered to the plasma membrane. Ii–MHC class II complexes are internalized by clathrin-mediated endocytosis and traffic to multivesicular antigen-processing compartments. Some of these complexes are sorted into the intraluminal vesicles (ILVs) of multivesicular bodies (MVBs), in which sequential Ii proteolysis leads to the generation of a fragment of Ii, termed class II-associated invariant chain peptide (CLIP), which remains in the peptide-binding groove of MHC class II. CLIP is removed from CLIP–MHC class II complexes by the enzyme HLA-DM, which is present in the MVB internal and limiting membranes, thereby facilitating peptide binding onto nascent MHC class II. The activity of HLA-DM is regulated by HLA-DO, but the mechanism of regulation remains unknown. ILV-associated peptide–MHC class II somehow associates with the MVB limiting membrane, and endosomal–lysosomal tubules directed towards the plasma membrane either directly fuse or give rise to transport vesicles that fuse with the plasma membrane. MVB membranes are rich in the lipids that constitute lipid raft membrane microdomains, and fusion of peptide–MHC class II from MVB-derived membranes with the plasma membrane leads to the deposition of lipid raft-associated peptide–MHC class II directly into the plasma membrane. In circumstances in which an entire MVB fuses with the plasma membrane, the ILVs of MVBs are released from the APC in the form of exosomes. Surface expressed peptide–MHC class II can be internalized through a clathrin-independent endocytosis pathway and can be targeted for lysosomal degradation or can recycle back to the plasma membrane.