.174xCEM.T2 (T2) is a human cell hybrid that has a large homozygous deletion within the MHC, including all of the functional class 11 genes. We have generated stable HLA-DR3 and H-2 I-A(k) transfectants of T2 that express parental levels of class II molecules at the cell surface. T2.A(k) transfectants fail to stimulate a hen egg lysozyme (HEL)-specific, I-A(k)-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-A(k) transport in T2.A(k) are similar to the parental rates of transport, although the percentage of I-A(k) molecules transported appears somewhat lower. I-A(k) glycoproteins in T2.A(k) 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.