The ubiquitin-proteasome pathway is a well-characterized mechanism deputed to the degradation of intracellular proteins. Proteasomal degradation intervenes in the regulation of numerous cellular functions including signal transduction, apoptosis, cell cycle, and antigen presentation. In vitro and in vivo studies have shown that both normal and malignant cells of the immune system are exquisitely affected by inhibition of proteasome activity. This property is currently exploited in the treatment of multiple myeloma and mantle cell lymphoma, two B-cell malignancies that respond to treatment with the proteasome inhibitor bortezomib. Pharmacological inhibitors of the proteasome also affect function and survival of B and T lymphocytes and of dendritic cells and were shown to reduce autoimmune and inflammatory manifestations in several models of immune-mediated disorders. The present review offers an overview of the mechanisms implicated in the immunomodulatory effects of proteasome inhibitors and discusses prospective future applications for these small molecules in immune and inflammatory diseases.