Recent studies of the 20S proteasome from Thermoplasma acidophilum have uncovered some fundamental new properties of its catalytic mechanism. Unlike conventional proteases, 20S and 26S proteasomes degrade protein substrates in a highly processive fashion. They cleave a protein substrate to small peptides before attacking another substrate molecule. This processive behavior is an inherent feature of the 20S particle not requiring cofactors or ATP hydrolysis. Recently, we have described a proteasome-like particle, HslVU, in Escherichia coli. HslVU is a two-component ATP-dependent protease composed of the proteasome-related peptidase HslV (beta-subunit) and the ATPase HslU. In active HslVU complex, cleavage of small peptides and proteins requires the presence of ATP. EM analysis revealed that HslV and HslU are both ring-shaped particles and that the active HslVU complex is a cylindrical four-ring structure, composed of HslV, a two-ring dodecamer, sandwiched between HslU rings. Elucidation of its mode of action may help us understand the role of ATP in function of the 26S proteasome. Several proteasome-specific inhibitors have been recently identified which block the function of proteasome in vivo. These agents have proven very useful to clarify the intracellular function of the proteasome. In mammalian cells, both the rapid degradation of short-lived regulatory proteins and of abnormal polypeptides and the slower degradation of long-lived proteins are blocked by these agents. Thus, in mammalian cells, the proteasome is the site for the degradation of most cell proteins. In contrast, in budding yeast, proteasome inhibitors block the degradation of short-lived proteins but not the breakdown of long-lived proteins, which can be blocked by inhibitors of vacuolar proteases. The inhibition of proteasome function in yeast and mammalian cells, presumably by causing an accumulation of unfolded proteins, triggers the expression of heat shock proteins and concomitantly increases cell resistance to high temperature and various toxic insults.