The conversion of exogenous and endogenous proteins into immunogenic peptides recognized by T lymphocytes involves a series of proteolytic and other enzymatic events culminating in the formation of peptides bound to MHC class I or class II molecules. Although the biochemistry of these events has been studied in detail, only in the past few years has similar information begun to emerge describing the cellular context in which these events take place. This review thus concentrates on the properties of antigen-presenting cells, especially those aspects of their overall organization, regulation, and intracellular transport that both facilitate and modulate the processing of protein antigens. Emphasis is placed on dendritic cells and the specializations that help account for their marked efficiency at antigen processing and presentation both in vitro and, importantly, in vivo. How dendritic cells handle antigens is likely to be as important a determinant of immunogenicity and tolerance as is the nature of the antigens themselves.