A growing body of evidence demonstrates that the components of the proteasome are involved directly and mechanistically in the regulation of gene transcription. Proteolytic activities of the proteasome are important for establishing limits for transcription, for promoting the exchange of transcription factors on chromatin, and possibly for facilitating multiple rounds of transcription initiation. Non-proteolytic activities of the proteasome are important for co-activator recruitment, transcriptional elongation, and histone modification. Here, we discuss different ways in which the proteasome can influence transcription, and argue that its unique combination of biological activities makes it ideally suited to act at multiple stages in the transcription process.