The yeast Sen1 protein was discovered by virtue of its role in tRNA splicing in vitro. To help determine the role of Sen1 in vivo, we attempted to overexpress the protein in yeast cells. However, cells with a high-copy SEN1-bearing plasmid, although expressing elevated amounts of SEN1 mRNA, show little increase in the level of the encoded protein, indicating that a posttranscriptional mechanism limits SEN1 expression. This control depends on an amino-terminal element of Sen1. Using a genetic selection for mutants with increased expression of Sen1-derived fusion proteins, we identified mutations in a novel gene, designated SEN3. SEN3 is essential and encodes a 945-residue protein with sequence similarity to a subunit of an activator of the 20S proteasome from bovine erythrocytes, called PA700. Earlier work indicated that the 20S proteasome associates with a multisubunit regulatory factor, resulting in a 26S proteasome complex that degrades substrates of the ubiquitin system. Mutant sen3-1 cells have severe defects in the degradation of such substrates and accumulate ubiquitin-protein conjugates. Most importantly, we show biochemically that Sen3 is a subunit of the 26S proteasome. These data provide evidence for the involvement of the 26S proteasome in the degradation of ubiquitinated proteins in vivo and for a close relationship between PA700 and the regulatory complexes within the 26S proteasome, and they directly demonstrate that Sen3 is a component of the yeast 26S proteasome.