HLA-DM is a major histocompatibility complex (MHC) class II–like molecule that facilitates antigen processing by catalyzing the exchange of invariant chain–derived peptides (CLIP) from class II molecules for antigenic peptides. HLA-DO is a second class II–like molecule that physically associates with HLA-DM in B cells. HLA-DO was shown to block HLA-DM function. Purified HLA-DM-DO complexes could not promote peptide exchange in vitro. Expression of HLA-DO in a class II⁺ and DM⁺, DO⁻ human T cell line caused the accumulation of class II–CLIP complexes, indicating that HLA-DO blocked DM function in vivo and suggesting that HLA-DO is an important modulator of class II–restricted antigen processing.