Classical human leukocyte antigen (HLA) molecules of the major histocompatibility class II (MHCII) complex present peptides for the development, surveillance and activation of CD4+ T cells. The nonclassical MHCII-like protein HLA-DM (DM) catalyzes the exchange and loading of peptides onto MHCII molecules, thereby shaping MHCII immunopeptidomes. Natural variations of DM in both chains of the protein (DMA and DMB) have been hypothesized to impact peptide presentation, but no evidence for altered function has been reported. Here we define the presence of DM allotypes in human populations covered by the 1000 Genomes Project and probe their activity. The functional properties of several allotypes are investigated and show strong enhancement of peptide-induced T cell activation for a particular combination of DMA and DMB. Biochemical evidence suggests a broader pH activity profile for the new variant relative to that of the most commonly expressed DM allotype. Immunopeptidome analysis indicates that the compartmental activity of the new DM heterodimer extends beyond the late endosome and suggests that the natural variation of DM has profound effects on adaptive immunity when antigens bypass the canonical processing pathway.