Among the self antigens, immunoglobulins, and in particular idiotypes, are of special interest because of their extreme sequence heterogeneity and their postulated involvement in regulatory interactions in the immune system. We have therefore studied antigen processing and presentation of variable region peptides, processed idiotypes, to MHC class II molecule-restricted T cells. The immunoglobulin used has been the lambda 2(315) light chain produced by the BALB/c MOPC 315 plasmacytoma (alpha, lambda 2). The minimum length of a stimulatory synthetic idiotypic peptide comprises residues 91-101 of lambda 2(315) and is presented by the I-E(d) molecule to CD4+ T cells. T cell clones with specificity for the 91-101(lambda 2(315))/I-E(d) complex utilize a limited TCR repertoire and are of both Th1 and Th2 type. For presentation, extracellular lambda 2(315) requires endocytosis and processing, as previously described for conventional exogenous antigens. In addition, a B lymphoma cell can process and present its own endogenous lambda 2(315). This was shown by transfecting manipulated lambda 2(315) gene variants into B lymphoma cells, followed by evaluation of the APC function of the transfectants. These studies demonstrated that surface expression or secretion of lambda 2(315) is not necessary for presentation and suggested that the endoplasmic reticulum may be a processing compartment. To extend our findings to naive Id+ B cells and anti-Id T cells, we have generated lambda 2(315)-transgenic as well as TCR-transgenic mice. A model is presented for a T-B cell interaction based on presentation of processed idiotypes.