Synaptic proteins and synaptic transmission are under homeostatic control, but the relationship between these two processes remains enigmatic. Here, we systematically investigated the role of E3 ubiquitin ligases, key regulators of protein degradation-mediated proteostasis, in presynaptic homeostatic plasticity (PHP). An electrophysiology-based genetic screen of 157 E3 ligase-encoding genes at the Drosophila neuromuscular junction identified thin, an ortholog of human tripartite motif-containing 32 (TRIM32), a gene implicated in several neurological disorders, including autism spectrum disorder and schizophrenia. We demonstrate that thin functions presynaptically during rapid and sustained PHP. Presynaptic thin negatively regulates neurotransmitter release under baseline conditions by limiting the number of release-ready vesicles, largely independent of gross morphological defects. We provide genetic evidence that thin controls release through dysbindin, a schizophrenia-susceptibility gene required for PHP. Thin and Dysbindin localize in proximity within presynaptic boutons, and Thin degrades Dysbindin in vitro. Thus, the E3 ligase Thin links protein degradation-dependent proteostasis of Dysbindin to homeostatic regulation of neurotransmitter release.