The highly conserved ubiquitin-proteasome system (UPS) controls the stability of most nuclear and cytoplasmic proteins and is therefore essential for virtually all aspects of cellular function. We have previously shown that the UPS is impaired in the presence of aggregated proteins that become deposited into cytoplasmic inclusion bodies (IBs). Here, we report that production of protein aggregates specifically targeted to either the nucleus or cytosol leads to global impairment of UPS function in both cellular compartments and is independent of sequestration of aggregates into IBs. The observation of severe UPS impairment in compartments lacking detectable aggregates or aggregation-prone protein, together with the lack of interference of protein aggregates on 26S proteasome function in vitro, suggests that UPS impairment is unlikely to be a consequence of direct choking of proteasomes by protein aggregates. These data suggest a common proteotoxic mechanism for nuclear and cytoplasmic protein aggregates in the pathogenesis of neurodegenerative disease.