Steroid receptor coactivator-3 (SRC-3/AIB1) is an oncogene frequently amplified and overexpressed in breast cancers. Here we report that SRC-3 interacts with REGγ, a proteasome activator known to stimulate the trypsin-like activity of the 20S proteasome. RNAi knockdown and gain-of-function experiments suggest that REGγ promotes SRC-3 protein degradation. Cellular levels of REGγ expression affect estrogen-receptor target-gene expression and cell growth as a result of its ability to promote degradation of the SRC-3 protein. In vitro proteasome proteolysis assays using purified REGγ, SRC-3, and the 20S proteasome reinforce these conclusions and demonstrate that REGγ promotes the degradation of SRC-3 in a ubiquitin- and ATP-independent manner. This work demonstrates the first example of a physiologically relevant endogenous cellular target for the REGγ-proteasome complex. It also highlights the fact that an alternative mode of proteasome-mediated protein degradation, independent of the 19S proteasome regulatory cap, targets the SRC-3 protein for degradation.