Curcumin, a natural polyphenolic compound, has long been known as an anti-tumour and anti-inflammatory compound; although, the common mechanism through which it exhibits such properties are remains unclear. Recently, we reported that the curcumin-induced apoptosis is mediated through the impairment of ubiquitin proteasome system (UPS). Here, we show that curcumin disrupts UPS function by directly inhibiting the enzyme activity of the proteasome's 20S core catalytic component. Like other proteasome inhibitors, curcumin exposure induces neurite outgrowth and the stress response, as evident from the induction of various cytosolic and endoplasmic reticulum chaperones as well as induction of transcription factor CHOP/GADD153. The direct inhibition of proteasome activity also causes an increase in half-life of IkappaB-alpha that ultimately leads to the down-regulation of NF-kappaB activation. These results suggest that curcumin-induced proteasomal malfunction might be linked with both anti-proliferative and anti-inflammatory activities.