An immunodominant epitope of human immunodeficiency virus-1 (HIV-1) gp160 recognized by Dd class I major histocompatibility complex (MHC) molecule-restricted, CD8+ cytotoxic T lymphocytes (CTL) was originally identified as a peptide composed of 15 amino acids (P18IIIB: RIQRGPGRAFVTIGK). However, further study has indicated that a 10-mer peptide, I-10 (RGPGRAFVTI), within P18IIIB is the minimal-sized epitope and the trimming step(s) of two carboxyl terminal amino acids (GK) is essential to produce I-10 from P18IIIB. In the processing, angiotensin-1-converting enzyme (ACE), found in sera, plays a central role in generating I-10. Target cells could be sensitized with I-10 under conditions where ACE activity in the sera was abrogated. In contrast, in the case of P18IIIB, requiring further processing to delete the C-terminus of two amino acids in order to act, sensitization of target cells was completely abrogated under the conditions. Pretreatment of target cells with brefeldin A (BFA), preventing the presentation of endogenous antigens from the class I MHC molecule pathway, did not inhibit the presentation of P18IIIB. Moreover, glutaraldehyde-fixed cells, which can not process native protein, though they could present the exogenously added peptides, were also sensitized by P18IIIB. These results clearly demonstrate that the fine processing to produce I-10 occurred in the extracellular milieu. Furthermore, our result suggests that the longer P18IIIB can bind to the class I molecules on the cell surface, and then be trimmed by ACE while it is bound. The mechanisms behind the extracellular processing outlined in this paper will offer important information for designing peptide-based vaccines to elicit MHC molecule-restricted effectors.