Mutations in presenilin proteins (PS1 and PS2) are associated with most cases of early-onset Alzheimer's disease. Several proteins appear to regulate accumulation of PS proteins in cells. One such protein is ubiquilin-1, which increases levels of coexpressed PS2 protein in a dose-dependent manner. We now report that overexpression of ubiquilin-2, which is 80% identical to ubiquilin-1, also increases the levels of coexpressed PS1 and PS2 proteins in cells. To investigate the mechanism by which ubiquilin proteins increase levels of PS proteins, we examined how overexpression of ubiquilin-1, which possesses all of the key signature motifs present in ubiquilin proteins, affects PS2 gene transcription and PS2 protein turnover and ubiquitination. HeLa cells overexpressing both PS2 and ubiquilin-1 had PS2 mRNA levels lower than HeLa cells overexpressing PS2 alone, indicating that ubiquilin-1 overexpression, in fact, decreases PS2 transcription. Cells overexpressing ubiquilin-1 and PS2 displayed decreased turnover of high molecular weight (HMwt) forms of PS2 but not of full-length PS2 proteins. The reduced turnover of HMwt PS2 proteins appears to be mediated by the binding of the ubiquitin-associated domain (UBA) of ubiquilin to ubiquitin chains conjugated onto PS2 proteins. Immunoprecipitation studies indicated that ubiquilin-1 overexpression decreases ubiquitination of coexpressed PS2 proteins, suggesting that binding of ubiquilin might block ubiquitin chain elongation. Consistent with this model, we found that the UBA domain of ubiquilin-1 binds poly-ubiquitin chains in vitro. In addition, we show that ubiquilin proteins colocalize with ubiquitin-immunoreactive structures in cells and that ubiquilin proteins are present within the inner core of aggresomes, which are structures associated with accumulation of misfolded proteins in cells. Our results suggest that ubiquilin proteins play an important role in regulating PS protein levels in cells.