The CD74 gene consists of 9 exons, different transcripts results in four protein variants.

CD74 gene is processed into 4 different in-vivo know transcripts resulting from two different translation initiation sites and alternative splicing (Borghese and Clanchy, 2011; UniProt Consortium, 2013):
P43 - The longest isoform. Contains a longer cytoplasmic tail due to the use of an alternative translation initiation site, and a THY domain from alternative splicing.
P41 - Similar to the P43 isoform but does not contain the longer cytoplasmic tail.
P35 - Similar to the P43 isoform but does not contain the THY domain.
P33 - Does not contain not the longer cytoplasmic tail and not the THY domain.

CD74 is a non-polymorphic type II integral membrane protein. The most common isoform is p33, which is 296 aa long and has a molecular weight of 33 kDa. The protein consists of three parts, a 46 aa long N-terminus cytoplasmic tail, 26 aa long transmembranal domain and a 224 aa long luminal region. CD74 assembles to homotrimers immediately after synthesis.

CD74 is mainly expressed in antigen presenting cells, endothelial cells and neuroglia cells.

Trimers of CD74 are expressed in the endoplasmic reticulum (ER), in association with MHC α and β chains. The complex is transported to the trans-Golgi and then diverted from the secretory pathway to the endocytic system and ultimately to acidic endosome or lysosome-like structures called MHC class II compartments (MIIC or CIIV). A small proportion of CD74 is modified by the addition of chondroitin sulfate (CD74-CS), and this form of CD74 is expressed on the cell surface (Stumptner-Cuvelette and Benaroch, 2002).

CD74 function has two main functions:
1) MHCII chaperon
MHC class II molecules are heterodimeric complexes that present foreign antigenic peptides on the cell surface of antigen-presenting cells (APCs) to CD4+ T cells. MHC class II synthesis and assembly begins in the endoplasmic reticulum (ER) with the non-covalent association of the MHC α and β chains with trimers of CD74. Three MHC class II α β dimers bind sequentially to a trimer of the CD74 to form a nonameric complex (αβCD74)3, which then exits the ER (Roche et al., 1991). After being transported to the trans-Golgi, the αβCD74 complex is diverted from the secretory pathway to the endocytic compartments. Once in the endocytic compartments, CD74 is proteolytically processed. CD74 lumenal domain undergoes a stepwise proteolytic cleavage, which results in a short class II-associated Ii chain peptide (CLIP), which remains in the MHC class II peptide grove (Neefjes et al., 1990; Roche and Cresswell, 1991; Stumptner-Cuvelette and Benaroch, 2002). The final step for MHC class II expression requires interaction of αβCLIP complexes with another class II-related αβ dimer, called HLA-DM. Binding of this molecule excludes the residual CLIP peptide, rendering the αβ dimers ultimately competent to bind antigenic peptides, which are mainly derived from internalized antigens and also are delivered to the endocytic pathway (Denzin and Cresswell, 1995; Ghosh et al., 1995). Thus, CD74 was thought to function mainly as MHC class II chaperone, which promotes ER exit of MHC class II molecules, directs them to endocytic compartments, prevents self-peptide binding in the ER and contributes to peptide editing in the MHC class II compartment (Matza et al., 2003).
2) CD74 as cell surface receptor
A small proportion of CD74 is modified by the addition of chondroitin sulfate (CD74-CS), and this form of CD74 is expressed on the cell surface (Matza et al., 2003; Naujokas et al., 1993). This cell surface expression of CD74 is not strictly dependent on class II MHC (Henne et al., 1995; Starlets et al., 2006), and numerous non-class II positive cells express CD74 where it can serve as a receptor for the initiation of different signaling cascades (Maharshak et al., 2010; Stumptner-Cuvelette and Benaroch, 2002). The cytokine, macrophage migration inhibitory factor (MIF), was found to be the natural ligand of CD74. MIF binds to the extracellular domain of CD74 with high affinity (KD = 1.40 × 10^-9 M) and initiates a signaling cascade (Leng et al., 2003). CD74 forms a complex with CD44, which is essential for the MIF-induced signaling cascade (Gore et al., 2008; Shi et al., 2006).
In murine B cells, CD74 expression is directly involved in shaping the B cell repertoire by regulating mature B cell survival (Gore et al., 2008; Matza et al., 2003; Shachar and Flavell, 1996; Starlets et al., 2006). MIF binding to CD74 induces a signaling pathway that involves the Syk tyrosine kinase and the PI3K/Akt pathway (Gore et al., 2008; Starlets et al., 2006), induction of CD74 intramembrane cleavage, and the release of the CD74 intracellular domain (CD74-ICD) (Matza et al., 2002; Schneppenheim et al., 2013). CD74-ICD translocates to the nucleus where it induces activation of transcription mediated by the NF-κB p65/RelA homodimer and its co-activator, TAFII105, resulting in regulation of transcription of genes that control B cell proliferation and survival (Gore et al., 2008; Matza et al., 2001; Starlets et al., 2006). MIF was found to regulate cell entry into the S-phase in a CD74 and CD44-dependent fashion, by elevating cyclin E levels, resulting in cell proliferation. In addition, this cascade augments Bcl-2 expression, further supporting cell survival (Cohen et al., 2012; Gordin et al., 2010; Gore et al., 2008; Lantner et al., 2007; Sapoznikov et al., 2008; Starlets et al., 2006). Thus, the MIF binding to CD74/CD44 complex initiates a pathway, resulting in proliferation of the mature B cell population, and their rescue from death.