Protein-protein interactions between E3 ubiquitin ligases and protein termini help shape the proteome. These interactions are sensitive to proteolysis, which alters the ensemble of cellular N and C termini. Here we describe a mechanism wherein caspase activity reveals latent C termini that are then recognized by the E3 ubiquitin ligase CHIP. Using expanded knowledge of CHIP's binding specificity, we predicted hundreds of putative interactions arising from caspase activity. Subsequent validation experiments confirmed that CHIP binds the latent C termini at tauD421 and caspase-6D179. CHIP binding to tauD421, but not tauFL, promoted its ubiquitination, while binding to caspase-6D179 mediated ubiquitin-independent inhibition. Given that caspase activity generates tauD421 in Alzheimer's disease (AD), these results suggested a concise model for CHIP regulation of tau homeostasis. Indeed, we find that loss of CHIP expression in AD coincides with the accumulation of tauD421 and caspase-6D179. These results illustrate an unanticipated link between caspases and protein homeostasis.