Proteasomes are large multisubunit proteases that are found in the cytosol, both free and attached to the endoplasmic reticulum, and in the nucleus of eukaryotic cells. Their ubiquitous presence and high abundance in these compartments reflects their central role in cellular protein turnover. Proteasomes recognize, unfold, and digest protein substrates that have been marked for degradation by the attachment of a ubiquitin moiety. Individual subcomplexes of the complete 26S proteasome are involved in these different tasks: The ATP-dependent 19S caps are believed to unfold substrates and feed them to the actual protease, the 20S proteasome. This core particle appears to be more ancient than the ubiquitin system. Both prokaryotic and archaebacterial ancestors have been identified. Crystal structures are now available for the E. coli proteasome homologue and the T. acidophilum and S. cerevisiae 20S proteasomes. All three enzymes are cylindrical particles that have their active sites on the inner walls of a large central cavity. They share the fold and a novel catalytic mechanism with an N-terminal nucleophilic threonine, which places them in the family of Ntn (N terminal nucleophile) hydrolases. Evolution has added complexity to the comparatively simple prokaryotic prototype. This minimal proteasome is a homododecamer made from two hexameric rings stacked head to head. Its heptameric version is the catalytic core of archaebacterial proteasomes, where it is sandwiched between two inactive antichambers that are made up from a different subunit. In eukaryotes, both subunits have diverged into seven different subunits each, which are present in the particle in unique locations such that a complex dimer is formed that has six active sites with three major specificities that can be attributed to individual subunits. Genetic, biochemical, and high-resolution electron microscopy data, but no crystal structures, are available for the 19S caps. A first step toward a mechanistic understanding of proteasome activation and regulation has been made with the elucidation of the X-ray structure of the alternative, mammalian proteasome activator PA28.