The modification of proteins by chains of ubiquitin has long been known to mediate targeting of cytosolic and nuclear proteins for degradation by proteasomes. In this article, we discuss recent developments that reveal the involvement of ubiquitin in the degradation of proteins retained within the endoplasmic reticulum (ER) and in the internalization of plasma membrane proteins. Both luminal and transmembrane proteins retained in the ER are now known to be retrotranslocated into the cytosol in a process that involves ER chaperones and components of the protein import machinery. Once exposed to the cytosolic milieu, retro-translocated proteins are degraded by the proteasome, in most cases following polyubiquitination. There is growing evidence that both the ubiquitin-conjugating machinery and proteasomes may be associated with the cytosolic face of the ER membrane and that they could be functionally coupled to the process of retrotranslocation. The ubiquitination of plasma membrane proteins, on the other hand, mediates internalization of the proteins, which in most cases is followed by lysosomal/vacuolar degradation. There is, however, a well-documented case of a plasma membrane protein (the c-Met receptor) for which ubiquitination results in proteasomal degradation. These recent findings imply that ubiquitin plays more diverse roles in the regulation of the fate of cellular proteins than originally anticipated.