The small ubiquitin-related modifiers (SUMOs) are evolutionarily conserved polypeptides that are covalently conjugated to protein targets to modulate their subcellular localization, half-life, or activity. Steady-state SUMO conjugation levels increase in response to many different types of environmental stresses, but how the SUMO system is regulated in response to these insults is not well understood. Here, we characterize a novel mode of SUMO system control: in response to elevated alcohol levels, the Saccharomyces cerevisiae SUMO protease Ulp1 is disengaged from its usual location at the nuclear pore complex (NPC) and sequestered in the nucleolus. We further show that the Ulp1 region previously demonstrated to interact with the karyopherins Kap95 and Kap60 (amino acids 150 to 340) is necessary and sufficient for nucleolar targeting and that enforced sequestration of Ulp1 in the nucleolus significantly increases steady-state SUMO conjugate levels, even in the absence of alcohol. We have thus characterized a novel mechanism of SUMO system control in which the balance between SUMO-conjugating and -deconjugating activities at the NPC is altered in response to stress via relocalization of a SUMO-deconjugating enzyme.