We have studied the degradation of a set of long peptides (9-30 amino acids) from the nucleoprotein of influenza A. In common for all these peptides is the core sequence NH2-Ser-Arg-Tyr-Trp-Ala-Ile-Arg-Thr-Arg-COOH, NP383-391, known as an antigenic peptide specific for the HLA-B27 class I antigen. We show that this peptide is generated by enriched cytosolic proteasomes of two sizes, 20S and 12S. The 12S proteasome is the precursor, the preproteasome, to the 20S mature proteasome as shown by pulse-chase experiment and is most likely responsible for the proteolytic activity in the 12S region. Cleavage at the N-terminus is distinct and restricted to residue 383, independent of the N-terminal extension of the peptide. The C-terminus is generated via cleavage at three sites. Intermediate and final peptide products were identified by mass spectrometry. Finally, we show that the NP383-391 peptide generated by proteasomes in vitro is functional inasmuch as it possesses the ability to stimulate assembly of in vitro translated HLA-B27 antigens.