The conserved npl4 protein complex mediates proteasome-dependent membrane-bound transcription factor activation.

Proteolytic activation of membrane-bound transcription factors has emerged as an important mechanism for the regulation of gene expression. Two membrane-bound transcription factors regulated in this manner are the Saccharomyces cerevisiae proteins Mga2p and Spt23p, which direct transcription of the Delta9-fatty acid desaturase gene OLE1. We now show that a membrane-associated complex containing the highly conserved Npl4p, Ufd1p, and Cdc48p proteins mediates the proteasome-regulated cleavage of Mga2p and Spt23p. Mutations in NPL4, UFD1, and CDC48 cause a block in Mga2p and Spt23p processing, with concomitant loss of OLE1 expression. Taken together, our data indicate that the Npl4 complex may serve to target the proteasome to the ubiquitinated endoplasmic reticulum membrane-bound proteins Mga2p and Spt23p. Given the recent finding that NPL4 is allelic to the ERAD gene HRD4, we further propose that this NPL4 function extends to all endoplasmic reticulum-membrane-associated targets of the proteasome.