We recently reported a mouse model called ACE 10/10 in which macrophages overexpress the carboxypeptidase angiotensin-converting enzyme (ACE). These mice have an enhanced inflammatory response to tumors that markedly inhibits tumor growth. Here, we show that ACE modifies the C termini of peptides for presentation by major histocompatibility complex (MHC) class I molecules. The peptide-processing activity of ACE applies to antigens from either the extracellular environment (cross-presentation) or antigens produced endogenously. Consistent with its role in MHC class I antigen processing, ACE localizes to the endoplasmic reticulum. ACE overexpression does not appear to change the overall supply of peptides available to MHC class I molecules. The immunization of wild type mice previously given ACE 10/10 macrophages enhances the efficiency of antigen-specific CD8+ T cell priming. These data reveal that ACE is a dynamic participant in fashioning the peptide repertoire for MHC class I molecules by modifying the C termini of peptide precursors. Manipulation of peptidase expression by antigen-presenting cells may ultimately prove a useful strategy to enhance the immune response.