Antigen processing involves endocytosis, proteolysis and denaturation of antigens to generate peptides that bind to major histocompatibility complex class II molecules (Ia) in a complex recognized by CD4+ T cells. Ia and antigen are internalized and processed intracellularly, but the exact subcellular site of antigen degradation and formation of the Ia‐peptide complex remains unclear. The present studies utilized low‐temperature incubation in an attempt to functionally block certain steps in the processing of the antigen hen egg white lysozyme (HEL) by peritoneal exudate cells (PEC) and TA3 B lymphoma cells. Ia endocytosis and uptake of HEL by PEC persisted at 18 °C, albeit at somewhat slower rates, but delivery of ligands to lysosomes was blocked. Under these conditions HEL catabolism and antigen processing were effectively blocked, although enough HEL was internalized at 18 °C to provide effective presentation during a subsequent incubation at 37 °C. In TA3 cells transferrin endocytosis and recycling were notably slowed at 18 °C, and iron uptake from transferrin by TA3 cells was completely blocked, indicating that certain specifically endosomal functions were inhibited at 18 °C. Thus, intracellular steps in antigen processing were blocked at 18 °C, corresponding to deficits in endosomal processing and targeting. These results demonstrate that antigen endocytosis and certain temperature‐sensitive endosomal and lysosomal processes are essential for antigen processing.