The degradation of misfolded proteins is essential for cellular and organism viability. Quality control mechanisms of protein folding involve multi-component systems, which include chaperones, ubiquitylation enzymes, and ultimately degradation by the proteasome. So far, quality control mechanisms have been described in the cytoplasm, the nucleus and endoplasmic reticulum (ER) (Bader et al., 2007;Goldberg, 2003;Hampton, 2002;Jarosch et al., 2003;Meusser et al., 2005;von Mikecz, 2006).The recognition and degradation of misfolded proteins in the ER is called ER-associated degradation (ERAD) (Hampton, 2002;Jarosch et al., 2003;McCracken and Brodsky, 2003;Meusser et al., 2005;Richly et al., 2005;Sitia and Braakman, 2003). Membrane-spanning and secretory proteins are first transported into the ER in an unfolded state through the Sec61p complex (Matlack et al., 1998). Folding of these nascent polypeptides is assisted by a number of ER-resident chaperones. Translocated proteins also undergo modifications to support folding; these include N-terminal glycosylation and disulphide bond formation (Meusser et al., 2005;Schroder and Kaufman, 2005;Sitia and Braakman, 2003). In the ER, proteins that do not fold properly are retro-translocated to the cytoplasm. During retro-translocation, these misfolded proteins are ubiquitylated by several ER-specific E3 ubiquitin ligase complexes. A cytoplasmic ubiquitin-binding and multi-ubiquitylation enzyme complex further modifies these proteins and finally transports them to the proteasome for degradation.The accumulation of misfolded proteins in the ER activates the unfolded protein response (UPR), which is required for cells to survive conditions of stress. The UPR is mediated by three ER transmembrane proteins, IRE1, PERK and ATF6, which get activated at least in part because of the dissociation of the ER chaperone BiP, to which they are normally bound and also because of their sequestration by misfolded proteins (Bertolotti et al., 2000;Cox et al., 1993;Harding et al., 1999;Haze et al., 1999;Iwawaki et al., 2001;Kimata et al., 2004;Lee et al., 2002;Mori et al., 1993;Okamura et al., 2000). IRE1, PERK and ATF6 function to decrease the load on the ER by reducing translation rate and activating the transcription of chaperones, ERAD proteins and other enzymes. UPR activation also results in increased biosynthesis of some lipids, the elaboration of the ER and increased secretion (Sato et al., 2002;Shaffer et al., 2004;Sriburi et al., 2004). A major downstream regulator of UPR is XBP1/HAC1. Upon activation of IRE1, the XBP1 mRNA is directly spliced by an endonuclease activity in the C-terminus of IRE-1; this splice variant of XBP1 functions as a potent transcriptional activator of several genes (Calfon et al., 2002;Cox and Walter, 1996;Sidrauski and Walter, 1997;Yoshida et al., 2001).Derlin proteins are a conserved family that function in ERAD (Schekman, 2004). They have four transmembrane domains and are conserved in all eukaryotes. There are two members in Saccharomyces cerevisiae, Der1p a...