Molecular features of ligand binding to MHC class II HLA-DR molecules have been elucidated through a combination of peptide structure-activity studies and structure-based drug design, resulting in analogues with nanomolar affinity in binding assays. Stabilization of lead compounds against cathepsin B cleavage by N-methylation of noncritical backbone NH groups or by dipeptide mimetic substitutions has generated analogues that compete effectively against protein antigens in cellular assays, resulting in inhibition of T-cell proliferation. Crystal structures of four ternary complexes of different peptide mimetics with the rheumatoid arthritis-linked MHC DRB10401 and the bacterial superantigen SEB have been obtained. Peptide-sugar hybrids have also been identified using a structure-based design approach in which the sugar residue replaces a dipeptide. These studies illustrate the complementary roles played by phage display library methods, peptide analogue SAR, peptide mimetics substitutions, and structure-based drug design in the discovery of inhibitors of antigen presentation by MHC class II HLA-DR molecules.