Antitrypsin Deficiency is a primary cause of juvenile liver disease and arises from expression of the “Z” variant of the alpha-1 protease inhibitor (A1Pi). Whereas A1Pi is secreted from the liver, A1PiZ is retro-translocated from the endoplasmic reticulum (ER) and degraded by the proteasome, an event that may offset liver damage. To better define the mechanism of A1PiZ degradation, a yeast expression system was developed and a gene, ADD66, was identified that facilitates A1PiZ turn-over (Palmer et al., J. Cell. Sci. 116, 2361-2373, 2003). I report here that ADD66 encodes an ∼30 kDa soluble, cytosolic protein and that the chymotrypsin-like activity of the proteasome is reduced in add66Δ mutants. This reduction in activity may arise from the accumulation of 20S proteasome assembly intermediates or from qualitative differences in assembled proteasomes. Add66p also appears to be a proteasome substrate. Consistent with its role in ER associated degradation (ERAD), synthetic interactions are observed between the genes encoding Add66p and Ire1p, a transducer of the unfolded protein response, and yeast deleted for both ADD66 and/or IRE1 accumulate polyubiquitinated proteins. These data identify Add66p as a proteasome assembly chaperone (PAC) and provide the first link between PAC activity and ERAD.