Proteasomes are multicatalytic proteinase complexes which play a central role in intracellular protein degradation. They catalyse key events in cell cycle regulation and in the activation of the transcription factor NFkappaB. Proteasome inhibitors have been useful for the characterization of proteasome catalytic components and in the elucidation of proteasome functions in animal cells. Potent small peptide inhibitors of proteasomes also represent a novel approach to the treatment of inflammatory diseases (which involve activation of NFkappaB) and cancer. Such compounds have recently been shown to be effective in a variety of animal models, and at least one is currently in use in clinical trials.