The ATP-binding cassette transporter associated with antigen processing (TAP) is required for transport of antigenic peptides, generated by proteasome complexes in the cytoplasm, into the lumen of the endoplasmic reticulum where assembly with major histocompatibility complex class I molecules takes place. The TAP transporter is a heterodimer of TAP1 and TAP2. Here we show that both TAP1 and TAP2 are phosphorylated under physiological conditions. Phosphorylation induces formation of high molecular weight TAP complexes that contain TAP1, TAP2, tapasin, and class I heterodimers. In addition, a 43-kDa phosphoprotein, which appears to be a kinase, is contained in the phosphorylated TAP-containing complexes. Phosphorylated TAP complexes are able to bind peptides and ATP, however, they are not capable of transporting peptides. After de-phosphorylation, TAP complexes regain the ability to transport peptides. Interestingly, phosphorylation levels of TAP complexes induced by viral infection inversely correlates with a significant reduction in TAP-dependent peptide transport activity. Enhanced TAP phosphorylation appears to be one of several strategies that viruses have exploited to better escape from host immune surveillance. These results demonstrate that major histocompatibility complex class I antigen processing and presentation is modulated by reversible TAP phosphorylation, and implicate the importance of TAP phosphorylation in the regulation of cytotoxic immune response.