The amyloid β protein (Aβ) is derived from β‐amyloid precursor protein (APP). Cleavage of APP by β‐secretase generates a C‐terminal fragment (APPCTFβ or C99), which is subsequently cleaved by γ‐secretase to produce Aβ. BACE (or BACE1), the major β‐secretase involved in cleaving APP, has been identified as a Type 1 membrane‐associated aspartyl protease. In this study, we found that treatment with proteasome inhibitors resulted in an increase in APP C99 levels, suggesting that APP processing at the β‐secretase site may be affected by the ubiquitin‐proteasome pathway. To investigate whether the degradation of BACE is mediated by the proteasome pathway, cells stably transfected with BACE were treated with lactacystin. We found that BACE protein degradation was inhibited by lactacystin in a time‐ and dose‐dependent manner. Non‐proteasome protease inhibitors had no effect on BACE degradation. BACE protein is ubiquitinated. Furthermore, lactacystin increased APP C99 production and Aβ generation. Our data demonstrate that the degradation of BACE proteins and APP processing are regulated by the ubiquitin‐proteasome pathway.