Loss of neurons in neurodegenerative diseases is usually preceded by the accumulation of protein deposits that contain components of the ubiquitin/proteasome system. Affected neurons in Alzheimer's disease often accumulate UBB +1 , a mutant ubiquitin carrying a 19–amino acid C-terminal extension generated by a transcriptional dinucleotide deletion. Here we show that UBB +1 is a potent inhibitor of ubiquitin-dependent proteolysis in neuronal cells, and that this inhibitory activity correlates with induction of cell cycle arrest. Surprisingly, UBB +1 is recognized as a ubiquitin fusion degradation (UFD) proteasome substrate and ubiquitinated at Lys 29 and Lys 48 . Full blockade of proteolysis requires both ubiquitination sites. Moreover, the inhibitory effect was enhanced by the introduction of multiple UFD signals. Our findings suggest that the inhibitory activity of UBB +1 may be an important determinant of neurotoxicity and contribute to an environment that favors the accumulation of misfolded proteins.