Unfolded or misfolded proteins in the endoplasmic reticulum (ER) must be refolded or degraded to maintain homeostasis of the ER. The ATF6 and IRE1-XBP1 pathways are important for the refolding process in mammalian cells; activation of these transcriptional programs culminates in induction of ER-localized molecular chaperones and folding enzymes. We show here that degradation of misfolded glycoprotein substrates requires transcriptional induction of EDEM (ER degradation-enhancing α-mannosidase-like protein), and that this is mediated specifically by IRE1-XBP1 and not by ATF6. As XBP1 is produced after ATF6 activation, our results reveal a time-dependent transition in the mammalian unfolded protein response: an ATF6-mediated unidirectional phase (refolding only) is followed by an XBP1-mediated bidirectional phase (refolding plus degradation) as the response progresses.