Proteasomes usually degrade proteins completely into small peptides. In a few cases, however, proteasomal degradation rather results in protein processing, thereby yielding proteins of different biological activity. This process, termed "regulated ubiquitin/proteasome-dependent processing" or RUP, is essential for the function of certain transcription factors and crucial for their regulation. Examples are proteins of the mammalian NF-kappaB family and the yeast proteins SPT23 and MGA2. In this review, we summarize the available data and suggest a mechanistic model for proteasomal processing.