Ubiquitin‐dependent proteolytic systems underlie many processes, including the cell cycle, cell differentiation and responses to stress. One such system is the N‐end rule pathway, which targets proteins bearing destabilizing N‐terminal residues. Here we report that Ubr1p, the main recognition component of this pathway, regulates peptide import in the yeast Saccharomyces cerevisiae through degradation of Cup9p, a 35 kDa homeodomain protein. Cup9p was identified using a screen for mutants that bypass the previously observed requirement for Ubr1p in peptide import. We show that Cup9p is a short‐lived protein (t 1/2∼ 5 min) whose degradation requires Ubr1p. Cup9p acts as a repressor of PTR2, a gene encoding the transmembrane peptide transporter. In contrast to engineered N‐end rule substrates, which are recognized by Ubr1p through their destabilizing N‐terminal residues, Cup9p is targeted by Ubr1p through an internal degradation signal. The Ubr1p‐Cup9p‐Ptr2p circuit is the first example of a physiological process controlled by the N‐end rule pathway. An earlier study identified Cup9p as a protein required for an aspect of resistance to copper toxicity in S. cerevisiae. Thus, one physiological substrate of the N‐end rule pathway functions as both a repressor of peptide import and a regulator of copper homeostasis.