Degradation of a protein by the ubiquitin system involves two distinct processes. In the first step, ubiquitin is covalently linked in an ATP-dependent mode to the protein substrate. The protein moiety of the conjugate is then degraded by a specific protease into free amino acids, resulting in the release of free and reutilizable ubiquitin. This process also requires energy. In this review we will briefly summarize our current knowledge of the role of the ubiquitin system in protein turnover and discuss in detail the mechanism involved in selection of substrates for conjugation and in degradation of ubiquitin-conjugated proteins.