Forkhead transcription factors (FoxOs) play a pivotal role in controlling cellular proliferation and survival. The cellular level of these factors is tightly regulated through the phosphoinositide 3-kinase/Akt and ubiquitin-mediated degradation. However, the ubiquitin ligases responsible for the degradation of FoxO1 and the relevance of this regulation to smooth muscle cell (SMC) proliferation and survival have not been fully identified. Here we showed that overexpression of C terminus of Hsc70-interacting protein (CHIP) promoted ubiquitination and degradation of FoxO1 in SMCs in response to tumor necrosis factor-alpha. Both the U-box (containing ubiquitin ligase activity) and the charged (essential for FoxO1 binding) domains within CHIP were required for CHIP-mediated FoxO1 down-regulation. Moreover, interaction and ubiquitination of FoxO1 by CHIP depended on phosphorylation of FoxO1 at Ser-256. Furthermore, overexpression of CHIP repressed FoxO1-mediated transactivation and its proapoptotic function following tumor necrosis factor-alpha treatment. In contrast, knockdown of CHIP by small interfering RNA enhanced FoxO1-mediated transactivation and its effect on SMC proliferation and survival. Taken together, our data indicate that CHIP is a negative regulator of FoxO1 activity through ubiquitin-mediated degradation, and inhibition of CHIP may serve as a potential therapeutic target for reducing proliferative arterial diseases.