Recent studies have shed light on the ligand-dependent transactivation mechanisms of nuclear receptors (NRs). When the ligand dose is reduced, the transcriptional activity of NRs should be downregulated. Here we show that a ubiquitin-proteasome pathway plays a key role in turning off transcription mediated by estrogen receptor β (ERβ). ERβ shows estrogen-dependent proteolysis, and its degradation is regulated by two regions in the receptor. The N-terminal 37-amino acid-region is necessary for the recruitment of the ubiquitin ligase, ie, the carboxyl terminus of HSC70-interacting protein (CHIP), to degrade ERβ. In contrast, the C-terminal F domain protects ligand-unbound ERβ from proteolysis to abrogate proteasome association. Suppression of CHIP by interfering RNA inhibited this switching off of receptor-mediated transcription when the ligand dose was reduced. Our results suggest that after ligand withdrawal, the active form of the NR is selectively eliminated via ligand-dependent proteolysis to downregulate receptor-mediated transcription.