Reduced sensitivity of the human malaria parasite, Plasmodium falciparum, to Artemisinin and its derivatives (ARTs) threatens the global efforts towards eliminating malaria. ARTs have been shown to cause ubiquitous cellular and genetic insults, which results in the activation of the unfolded protein response (UPR) pathways. The UPR restores protein homeostasis, which otherwise would be toxic to cellular survival. Here, we interrogated the role of DNA-damage inducible protein 1 (PfDdi1), a unique proteasome-interacting retropepsin in mediating the actions of the ARTs. We demonstrate that PfDdi1 is an active A2 family protease that hydrolyzes ubiquitinated substrates. We further show that treatment with ARTs lead to the accumulation of ubiquitinated proteins in the parasites and blocks the destruction of the ubiquitinated substrates by PfDdi1. Besides, whereas the PfDdi1 is predominantly localised in the cytoplasm, exposure of the parasites to ARTs leads to DNA fragmentation and increased recruitment of the PfDdi1 into the nucleus. Furthermore, Ddi1 knock-out Saccharomyces cerevisiae cells are more suceptible to ARTs and the PfDdI1 protein robustly restores the corresponding functions in the knock-out cells. Together, these results show that ARTs act by inducing DNA and protein damage, and impairing the damage recovery by inhibiting the activity of PfDdi1, an essential ubiquitin-proteasome retropepsin.