Because retention of mutant α1-antitrypsin (α 1-AT) Z in the endoplasmic reticulum (ER) is associated with liver disease in α1-AT-deficient individuals, the mechanism by which this aggregated glycoprotein is degraded has received considerable attention. In previous studies using stable transfected human fibroblast cell lines and a cell-free microsomal translocation system, we found evidence for involvement of the proteasome in degradation of α1-ATZ (Qu, D., Teckman, J. H., Omura, S., and Perlmutter, D. H. (1996) J. Biol. Chem. 271, 22791-22795). In more recent studies, Cabral et al. (Cabral, C. M., Choudhury, P., Liu, Y., and Sifers, R. N. (2000) J. Biol. Chem. 275, 25015-25022) found that degradation of α1-ATZ in a stable transfected murine hepatoma cell line was inhibited by tyrosine phosphatase inhibitors, but not by the proteasomal inhibitor lactacystin and concluded that the proteasome was only involved in ER degradation of α1-ATZ in nonhepatocytic cell types or in cell types with levels of α1-AT expression that are substantial lower than that which occurs in hepatocytes. To examine this important issue in further detail, in this study we established rat and murine hepatoma cell lines with constitutive and inducible expression of α 1-ATZ. In each of these cell lines degradation of α 1-ATZ was inhibited by lactacystin, MG132, epoxomicin, and clasto-lactacystin β-lactone. Using the inducible expression system to regulate the relative level of α1-ATZ expression, we found that lactacystin had a similar inhibitory effect on degradation of α 1-ATZ at high and low levels of α1-AT expression. Although there is substantial evidence that other mechanisms contribute to ER degradation of α1-ATZ, the data reported here indicate that the proteasome plays an important role in many cell types including hepatocytes.