The peptide-exchange catalyst, HLA-DM, and its inhibitor, HLA-DO control endosomal generation of peptide/class II major histocompatibility protein (MHC-II) complexes; these complexes traffic to the cell surface for inspection by CD4+ T cells. Some evidence suggests that pH influences DO regulation of DM function, but pH also affects the stability of polymorphic MHC-II proteins, spontaneous peptide loading, DM/MHC-II interactions and DM catalytic activity, imposing challenges on approaches to determine pH effects on DM-DO function and their mechanistic basis. Using optimized biochemical methods, we dissected pH-dependence of spontaneous and DM-DO-mediated class II peptide exchange and identified an MHC-II allele-independent relationship between pH, DO/DM ratio and efficient peptide exchange. We demonstrate that active, free DM is generated from DM-DO complexes at late endosomal/lysosomal pH due to irreversible, acid-promoted DO destruction rather than DO/DM molecular dissociation. Any soluble DM that remains in complex with DO stays inert. pH-exposure of DM-DO in cell lysates corroborates such a pH-regulated mechanism, suggesting acid-activated generation of functional DM in DO-expressing cells.