THE presentation of intracellular proteins to the immune system requires their degradation to small peptides^1,2 that then become associated with major histocompatibility complex (MHC) class I molecules^3,4. The generation of these peptides may involve the 20S or 26S proteasome particles, which contain multiple proteolytic activities^5—14 including distinct sites that preferentially cleave small peptides on the carboxyl side of hydrophobic, basic or acidic residues^6,13,14. Degradation of most cell proteins requires their con-jugation to ubiquitin before hydrolysis by the 26S protea-some^6,13—16. This large complex contains the 20S proteasome as its proteolytic core^6,14,16—18. This ubiquitin-dependent proteolytic pathway is implicated in MHC class I presentation^11,12. γ-Inter-feron (γ-IFN), a stimulator of antigen presentation1, induces a subclass of proteasomes that contain two MHC-encoded subunits, LMP2 and 7 (refs 5—10). Here we show that γ-interferon alters the peptidase activities of the 20S and 268 proteasomes without affecting the rates of breakdown of proteins or of ubiquitinated proteins. By enhancing the expression of MHC genes, γ-IFN increases the proteasomes' capacity to cleave small peptides after hydrophobic and basic residues but reduces cleavage after acidic residues. Moreover, proteasomes of mutants lacking LMP sub-units show decreased rates of cleavage after hydrophobic and basic residues. Thus, γ-IFN and expression of these MHC genes should favour the production by proteasomes of the types of peptides found on MHC class I molecules, which terminate almost exclusively with hydrophobic or basic residues¹⁹.