Alternate class I MHC (MHC-I) Ag processing via cytosolic or vacuolar pathways leads to cross-presentation of exogenous Ag to CD8 T cells. Vacuolar alternate MHC-I processing involves phagolysosomal Ag proteolysis and peptide binding to MHC-I in post-Golgi compartments. We report the first study of alternate MHC-I Ag processing in tapasin(-/-) cells and experiments with tapasin(-/-) and TAP1(-/-) macrophages that characterize alternate MHC-I processing. Tapasin promotes retention of MHC-I in the endoplasmic reticulum (ER) for loading with high affinity peptides, whereas tapasin(-/-) cells allow poorly loaded MHC-I molecules to exit the ER. Hypothetically, we considered that a large proportion of post-Golgi MHC-I on tapasin(-/-) cells might be peptide-receptive, enhancing alternate MHC-I processing. In contrast, alternate MHC-I processing was diminished in both tapasin(-/-) and TAP1(-/-) macrophages. Nonetheless, these cells efficiently presented exogenous peptide, suggesting a loss of MHC-I stability or function specific to vacuolar processing compartments. Tapasin(-/-) and TAP1(-/-) macrophages had decreased MHC-I stability and increased susceptibility of MHC-I to inactivation by acidic conditions (correlating with vacuolar pH). Incubation of tapasin(-/-) or TAP1(-/-) cells at 26 degrees C decreased susceptibility of MHC-I to acid pH and reversed the deficiency in alternate MHC-I processing. Thus, tapasin and TAP are required for MHC-I to bind ER-derived stabilizing peptides to achieve the stability needed for alternate MHC-I processing via peptide exchange in acidic vacuolar processing compartments. Acidic pH destabilizes MHC-I, but also promotes peptide exchange, thereby enhancing alternate MHC-I Ag processing. These results are consistent with alternate MHC-I Ag processing mechanisms that involve binding of peptides to MHC-I within acidic vacuolar compartments.