Highly purified mature epithelial cells (EC) from murine small intestinal villi (excluding Peyer's patch epithelium) were examined for their capacity to present foreign antigen to T cells. Cell suspensions composed of 99% Ia+T200- EC were able to present keyhole limpet hemocyanin to an antigen-specific class II-restricted L3T4+ T cell hybridoma, and stimulate interleukin 2 production. Antigen presentation by EC was inhibited by major histocompatibility complex class II-specific monoclonal antibodies. It is concluded that EC express functional class II molecules and may activate adjacent CD4+ T cells to induce lymphokine synthesis.