Proteasomes are multisubunit enzyme complexes that reside in the cytoplasm and nucleus of eukaryotic cells. By selective protein degradation, proteasomes regulate many cellular processes including MHC class I antigen processing. Three constitutively expressed catalytic subunits are responsible for proteasome mediated proteolysis. These subunits are exchanged for three homologous subunits, the immunosubunits, in IFNgamma-exposed cells and in cells with specialized antigen presenting function. Both constitutive and immunoproteasomes degrade endogenous proteins into small peptide fragments that can bind to MHC class I molecules for presentation on the cell surface to cytotoxic T lymphocytes. However, immunoproteasomes seem to fulfill this function more efficiently. IFNgamma further induces the expression of a proteasome activator, PA28, which can also enhance antigenic peptide production by proteasomes. In this review, we will introduce the ubiquitin-proteasome system and summarize recent findings regarding the role of the IFNgamma-inducible proteasome subunits and proteasome regulators in antigen processing. We review the different ways by which tumors and viruses have been found to target the proteasome system to avoid MHC class I presentation of their antigens, and discuss recent progressions in the development of computer assisted approaches to predict CTL epitopes within larger protein sequences, based on proteasome cleavage specificity. The availability of such programs as well as a general insight into the proteasome mediated steps in MHC class I antigen processing provides us with a rational basis for the design of new antiviral and anticancer T cell vaccines.