Major histocompatibility complex (MHC) class II molecules bind antigenic peptides rapidly after biosynthesis in antigen-presenting cells (APCs). By contrast, the rate of peptide binding to purified class II molecules is remarkably slow. We find that purified HLA-DR molecules bind peptides rapidly in the presence but not the absence of HLA-DM, a recently identified heterodimer required for efficient antigen processing. The same effect is seen with immunoprecipitated DM, suggesting that DM interacts directly with DR. Class II-associated invariant chain peptides (CLIP) are selectively and rapidly released from DR during incubation with DM at pH 5. We conclude that DM is a cofactor that enhances peptide binding to DR molecules through a mechanism involving peptide exchange.