ATF6, a 670 amino acid endoplasmic reticulum (ER) transmembrane glycoprotein with the electrophoretic mobility of a 90 kDa protein, is a key transcriptional activator of the unfolded protein response (UPR) that allows mammalian cells to maintain cellular homeostasis when the cells are subjected to a variety of environmental and physiological stress. Previous studies have established that ATF6 is a short‐lived protein, the activation of which involves relocation from the ER to the Golgi where it is cleaved by the S1P/S2P protease system to generate a nuclear form that acts as a transcriptional activator for ER‐stress inducible target genes such as Grp78/BiP. We report here that in addition to this process, ER‐stress mediated by thapsigargin triggers an acute proteasomal degradation of the pre‐existing pool of p90ATF6 independent of S1P/S2P cleavage. We showed that ATF6 is a direct target of proteasome‐ubiquitin pathway, and this process can be suppressed by proteasome inhibitors, ALLN and MG115. We further observed that in non‐stressed cells, p90ATF6 can be stabilized by MG115 but not ALLN and that treatment of cells with MG115 results in Grp78 induction in the absence of ER stress. These studies suggest that ER‐stress induced acute, transit degradation of p90ATF6 could represent a novel cellular defense mechanism to prevent premature cell death resulting from p90ATF6 activation. Further, inhibition of proteasome activity can result in chaperone protein gene induction through stabilization of p90ATF6 as well as accumulation of malfolded proteins. © 2004 Wiley‐Liss, Inc.