Abstract Peptide ligands presented by MHC class I (MHC-I) molecules are produced by degradation of cytosolic and nuclear, but also endoplasmic reticulum (ER)–resident, proteins by the proteasome. However, Ag processing of ER proteins remains little characterized. Studying processing and presentation of proinsulin, which plays a pivotal role in autoimmune diabetes, we found that targeting to the ER has profound effects not only on how proinsulin is degraded, but also on regulation of its cellular levels. While proteasome inhibition inhibited degradation and presentation of cytosolic proinsulin, as expected, it reduced the abundance of ER-targeted proinsulin. This targeting and protein modifications modifying protein half-life also had profound effects on MHC-I presentation and proteolytic processing of proinsulin. Thus, presentation of stable luminal forms was inefficient but enhanced by proteasome inhibition, whereas that of unstable luminal forms and of a cytosolic form were more efficient and compromised by proteasome inhibitors. Distinct stability of peptide MHC complexes produced from cytosolic and luminal proinsulin suggests that different proteolytic activities process the two Ag forms. Thus, both structural features and subcellular targeting of Ags can have strong effects on the processing pathways engaged by MHC-I–restricted Ags, and on the efficiency and regulation of their presentation.