Selective degradation of proteins at the endoplasmic reticulum (ER-associated degradation) is thought to proceed largely via the cytosolic ubiquitin-proteasome pathway. Recent data have indicated that the dislocation of short-lived integral-membrane proteins to the cytosolic proteolytic system may require components of the Sec61 translocon. Here we show that the proteasome itself can participate in the extraction of an ER-membrane protein from the lipid bilayer. In yeast mutants expressing functionally attenuated proteasomes, degradation of a short-lived doubly membrane-spanning protein proceeds rapidly through the N-terminal cytosolic domain of the substrate, but slows down considerably when continued degradation of the molecule requires membrane extraction. Thus, proteasomes engaged in ER degradation can directly process transmembrane proteins through a mechanism in which the dislocation of the substrate and its proteolysis are coupled. We therefore propose that the retrograde transport of short-lived substrates may be driven through the activity of the proteasome.