Cell-mediated immunity is effective against cells harboring active virus replication, and is critical for the elimination of ongoing infections, regression of virus-associated tumors, and reducing or preventing the reactivation of persistent viruses. The capacity of persistent and oncogenic viruses to maintain a long-term relationship with their host presupposes viral mechanisms for circumventing antiviral defenses. By suppressing the expression of molecules associated with antigen processing and presentation, viruses abrogate the major immune mechanism that deals with the elimination of infected and tumor cells. This is accomplished either by transcriptional downregulation of genes encoding class I MHC antigens, peptide transporter molecules, and the proteasome-associated LMP subunits, or by interfering with transport of class I molecules to the cell surface. In some cases viruses shut off the expression of most viral proteins during latency or express mainly nonimmunogenic or antagonistic peptide epitopes. This review describes selective mechanisms utilized by viruses for interference with antigen processing and presentation, and addresses their significance for in vivo viral persistence and tumor progression.