The RPN4 (SON1, UFD5) protein of the yeast Saccharomyces cerevisiae is required for normal levels of intracellular proteolysis. RPN4 is a transcriptional activator of genes encoding proteasomal subunits. Here we show that RPN4 is required for normal levels of these subunits. Further, we demonstrate that RPN4 is extremely short-lived (t(1/2) approximately 2 min), that it directly interacts with RPN2, a subunit of the 26S proteasome, and that rpn4Delta cells are perturbed in their cell cycle. The degradation signal of RPN4 was mapped to its N-terminal region, outside the transcription-activation domains of RPN4. The ability of RPN4 to augment the synthesis of proteasomal subunits while being metabolically unstable yields a negative feedback circuit in which the same protein up-regulates the proteasome production and is destroyed by the assembled active proteasome.