The proteasome is a major enzyme that cleaves proteins for antigen presentation. Cleaved peptides traffic to the cell surface, where they are presented in the context of major histocompatibility complex (MHC) class I. Recognition of these complexes by cytotoxic T lymphocytes is crucial for elimination of cells bearing "nonself" proteins. Our previous studies revealed that ethanol suppresses proteasome function in ethanol-metabolizing liver cells. We hypothesized that proteasome suppression reduces the hydrolysis of antigenic peptides, thereby decreasing the presentation of the peptide MHC class I complexes on the cell surface. To test this we used the mouse hepatocyte cell line (CYP2E1/ADH-transfected HepB5 cells) or primary mouse hepatocytes, both derived from livers of C57Bl/6 mice, which present the ovalbumin peptide, SIINFEKL, complexed with H2Kb. To induce H2Kb expression, HepB5 cells were treated with interferon gamma (IFN gamma) and then exposed to ethanol. In these cells, ethanol metabolism decreased not only proteasome activity, but also hydrolysis of the C-extended peptide, SIINFEKL-TE, and the presentation of SIINFEKL-H2Kb complexes measured after the delivery of SIINFEKL-TE to cytoplasm. The suppressive effects of ethanol were, in part, attributed to ethanol-elicited impairment of IFN gamma signaling. However, in primary hepatocytes, even in the absence of IFN gamma, we observed a similar decline in proteasome activity and antigen presentation after ethanol exposure. Conclusion: Proteasome function is directly suppressed by ethanol metabolism and indirectly by preventing the activating effects of IFN gamma. Ethanol-elicited reduction in proteasome activity contributes to the suppression of SIINFEKL-H2Kb presentation on the surface of liver cells. (HEPATOLOGY 2009;49:1308-1315.)