Machado-Joseph disease is caused by an expansion of a trinucleotide CAG repeat in the gene encoding the protein ataxin-3. We investigated if ataxin-3 was a proteasome-associated factor that recognized ubiquitinated substrates based on the rationale that (i) it is present with proteasome subunits and ubiquitin in cellular inclusions, (ii) it interacts with human Rad23, a protein that may translocate proteollytic substrates to the proteasome, and (iii) it shares regions of sequence similarity with the proteasome subunit S5a, which can recognize multiubiquitinated proteins. We report that ataxin-3 interacts with ubiquitinated proteins, can bind the proteasome, and, when the gene harbors an expanded repeat length, can interfere with the degradation of a well-characterized test substrate. Additionally, ataxin-3 associates with the ubiquitin- and proteasome-binding factors Rad23 and valosin-containing protein (VCP/p97), findings that support the hypothesis that ataxin-3 is a proteasome-associated factor that mediates the degradation of ubiquitinated proteins.