We have used RNA interference (RNAi) to examine the functional relationship between valosin-containing protein (VCP/p97/Cdc48p/TER94) ATPase and the ubiquitin-proteasome system (UPS) in Drosophila S2 and human HeLa cells. In both cell types, RNAi of VCP (and, to a lesser extent, of certain VCP-interacting proteins) caused significant accumulation of high-molecular-weight conjugates of ubiquitin, an indication of inhibited UPS function. However, decreased VCP levels did not directly inhibit proteasome activity. In HeLa cells, polyubiquitinated proteins accumulated as dispersed aggregates rather than as single aggresomes, even in the presence of proteasome inhibitors, which normally promote aggresome formation. RNAi of VCP caused extensive vacuolization of the cytoplasm, and proteasome inhibitors exaggerated this feature. RNAi of VCP had little effect on S2 cell proliferation but blocked cell-cycle progression and induced mitotic abnormalities and apoptosis in HeLa cells. These results indicate that VCP plays an important general role in mediating the function of the UPS, probably by interacting with potential proteasome substrates before they are degraded by the proteasome.