Production of antigenic peptides that serve as MHC class I ligands is essential for initiation of cell‐mediated immunity. Accumulating evidence indicates that the proteasome, a large multisubunit protein degradative machine in eukaryotes, functions as a processing enzyme responsible for the generation of MHC class I ligands. This processing system is elaborately regulated by various immunomodulatory cytokines. In particular, incerferon‐γ induces the formation of immunoproteasomes and a recently identified proteasomal regulatory factor, PA28, which in concert contribute co efficient production of MHC class I ligands. Many of the MHC‐encoded genes including LMP appear to have emerged by an ancient chromosomal duplication, suggesting that modifications and renewal of pre‐existing non‐immune genes were instrumental in the emergence of adaptive immunity.