The ATE1-encoded Arg-transferase mediates conjugation of Arg to N-terminal Asp, Glu, and Cys of certain eukaryotic proteins, yielding N-terminal Arg that can act as a degradation signal for the ubiquitin-dependent N-end rule pathway. We have previously shown that mouse ATE1^–/– embryos die with defects in heart development and angiogenesis. Here, we report that the ATE1 Arg-transferase mediates the in vivo degradation of RGS4 and RGS5, which are negative regulators of specific G proteins whose functions include cardiac growth and angiogenesis. The proteolysis of these regulators of G protein signaling (RGS) proteins was perturbed either by hypoxia or in cells lacking ubiquitin ligases UBR1 and/or UBR2. Mutant RGS proteins in which the conserved Cys-2 residue could not become N-terminal were long-lived in vivo. We propose a model in which the sequential modifications of RGS4, RGS5, and RGS16 (N-terminal exposure of their Cys-2, its oxidation, and subsequent arginylation) act as a licensing mechanism in response to extracellular and intracellular signals before the targeting for proteolysis by UBR1 and UBR2. We also show that ATE1^–/– embryos are impaired in the activation of extracellular signal-regulated kinase mitogen-activated protein kinases and in the expression of G protein-induced downstream effectors such as Jun, cyclin D1, and β-myosin heavy chain. These results establish RGS4 and RGS5 as in vivo substrates of the mammalian N-end rule pathway and also suggest that the O₂-ATE1-UBR1/UBR2 proteolytic circuit plays a role in RGS-regulated G protein signaling in the cardiovascular system.