Susceptibility to insulin-dependent diabetes mellitus is linked to MHC class II genes. The only MHC class II molecule expressed by nonobese diabetic (NOD) mice, IA g7, shares a common α-chain with IA d but has a peculiar β-chain. As with most β-chain alleles linked to diabetes susceptibility, IA g7 contains a nonaspartic residue at position β57. We have produced large amounts of empty IA g7 molecules using a fly expression system to characterize its biochemical properties and peptide binding by phage-displayed peptide libraries. The identification of a specific binding peptide derived from glutamic acid decarboxylase (GAD65) has allowed us to crystallize and obtain the three-dimensional structure of IA g7. Structural information was critical in evaluating the binding studies. IA g7, like IA d, appears to be very promiscuous in terms of peptide binding. Their binding motifs are degenerate and contain small and/or small hydrophobic residues at P4 and P6 of the peptide, a motif frequently found in most globular proteins. The degree of promiscuity is increased for IA g7 over IA d as a consequence of a larger P9 pocket that can specifically accommodate negatively charged residues, as well as possibly residues with bulky side chains. So, although IA d and IA g7 are structurally closely related, stable molecules and good peptide binders, they differ functionally in their ability to bind significantly different peptide repertoires that are heavily influenced by the presence or the absence of a negatively charged residue at position 57 of the β-chain. These characteristics link IA g7 with autoimmune diseases, such as insulin-dependent diabetes mellitus.