A soluble form of a mouse class I major histocompatibility antigen (H-2Kb) has been expressed in transfected Drosophila melanogaster cells. These molecules were efficiently secreted (up to 4 mg/liter) as noncovalent heterodimers and purified to homogeneity from cell supernatants. The isolated soluble Kb molecules were devoid of endogenous peptides. Using these molecules, we have characterized the Kb heavy chain-beta 2-microglobulin (beta 2m) assembly as well as peptide binding in vitro. In detergent-free solution the heavy chains readily re-assembled with beta 2m even in the absence of peptides. Kinetic analyses showed that the peptide binding is rapid and reversible and dependent on the heavy chains being assembled with beta 2m. Likewise, peptide dissociated from Kb molecules without the displacement of beta 2m. Equilibrium binding experiments using various peptides confirmed that octapeptides bind to Kb molecules with the highest affinity and form the most stable complexes. However, in contrast to earlier studies, the amino-terminal positioning of peptide to Kb molecules was more crucial than the carboxyl-terminal positioning and amidation of the peptide carboxylate did not affect the binding. Soluble Kb molecules could selectively bind allele-specific peptides among a mixture of randomly synthesized octapeptides in vitro; however, no dominant residue was observed at the carboxyl terminus of bound peptides. This suggests that the previously observed hydrophobic residues at the carboxyl terminus of peptides may reflect the specificity of enzyme(s) or protein(s) involved in peptide processing in vivo.