Targeting of different cellular proteins for conjugation and subsequent degradation via the ubiquitin pathway involves diverse recognition signals and distinct enzymatic factors. A few proteins are recognized via their N-terminal amino acid residue and conjugated by a ubiquitin-protein ligase that recognizes this residue. However, most substrates, including N-α-acetylated proteins that constitute the vast majority of cellular proteins, are targeted by different signals and are recognized by yet unknown ligases. In addition to the ligases, other factors may also be specific for the recognition of this subset of proteins. We have previously shown that degradation of N-terminally blocked proteins requires a specific factor, designated FH, and that the factor acts along with the 26S protease complex to degrade ubiquitin-conjugated proteins (Gonen et al., 1991). Further studies have shown that FH is identical to the protein synthesis elongation factor EF-1α, and that it can be substituted by the bacterial elongation factor EF-Tu (Gonen et al., 1994). This, rather surprising, finding raises two important and interesting problems. The first involves the mechanism of action of the factor and the second the possibility that protein synthesis and degradation may be regulated by a commonly shared factor. Here, we demonstrate that EF-1α is a ubiquitin C-terminal hydrolase (isopeptidase) that is probably involved in trimming the conjugates to lower molecular weight forms recognized by the 26S proteasome complex. Additional findings demonstrate that its activity is inhibited specifically by tRNA. This finding raises the possibility that under anabolic conditions, when the factor is associated with AA•tRNA and GTP, it is active in protein synthesis but inactive in proteolysis. Under catabolic conditions, when the factor is predominantly found in its apo form, it is active in proteolysis.