The mechanisms of HLA-DM catalyzed peptide exchange remain uncertain. We found that all stages of the interaction of DM with HLA-DR were dependent on the occupancy state of the peptide binding groove. High-affinity peptides were protected from removal by DM through two mechanisms: peptide binding induced dissociation of a long-lived complex of empty DR and DM, and high-affinity DR-peptide complexes bound DM only very slowly. Non-binding covalent DR-peptide complexes were converted to efficient DM binders upon truncation of an N-terminal peptide segment that emptied the P1 pocket and disrupted conserved hydrogen bonds to MHC. DM thus only binds to DR conformers in which a critical part of the binding site is vacant, due to spontaneous peptide motion.