Selective degradation of proteins in eukaryotes is mediated primarily by the ubiquitin system in conjunction with the 26S proteasome. The yeast Saccharomyces cerevisiae has proved a powerful model system to study protein degradation in vivo. Biochemical and genetic studies complemented by the sequence analysis of the entire yeast genome have identified more than 70 genes presumed to function in the ubiquitin/proteasome system. Moreover, a number of physiological substrates of the ubiquitin system have been identified in yeast which are key regulatory proteins involved in the control of the cell cycle and transcription. In this review we will describe the enzymes effecting ubiquitin-protein conjugation and degradation. In addition we will discuss several targets of this system and describe the cellular functions mediated by this pathway.