HLA-DR molecules bind microbial peptides in an endosomal compartment and present them on the cell surface for CD4 T cell surveillance. HLA-DM plays a critical role in the endosomal peptide selection process. The structure of the HLA-DM–HLA-DR complex shows major rearrangements of the HLA-DR peptide-binding groove. Flipping of a tryptophan away from the HLA-DR1 P1 pocket enables major conformational changes that position hydrophobic HLA-DR residues into the P1 pocket. These conformational changes accelerate peptide dissociation and stabilize the empty HLA-DR peptide-binding groove. Initially, incoming peptides have access to only part of the HLA-DR groove and need to compete with HLA-DR residues for access to the P2 site and the hydrophobic P1 pocket. This energetic barrier creates a rapid and stringent selection process for the highest-affinity binders. Insertion of peptide residues into the P2 and P1 sites reverses the conformational changes, terminating selection through DM dissociation. Display omitted ► Structure of HLA-DM-HLA-DR1 complex identifies key steps in antigen presentation ► Two aromatic HLA-DR residues move in and stabilize the hydrophobic P1 pocket ► Occlusion of P1 pocket enables rapid selection of high-affinity peptides ► Only peptides that successfully compete for the P1 pocket are stably bound HLA-DM catalyzes the binding of microbial peptides to the MHC class II cell surface receptor HLA-DR, which then presents the antigen to T cells. Crystal structures of the HLA-DM-HLA-DR complex reveal how DM changes the conformation of DR so that it can very rapidly distinguish high- from low-affinity peptides.