Peptide N-glycanase removes N-linked oligosaccharides from misfolded glycoproteins as part of the endoplasmic reticulum-associated degradation pathway. This process involves the formation of a tight complex of peptide N-glycanase with Rad23 in yeast and the orthologous HR23 proteins in mammals. In addition to its function in endoplasmic reticulum-associated degradation, HR23 is also involved in DNA repair, where it plays an important role in damage recognition in complex with the xeroderma pigmentosum group C protein. To characterize the dual role of HR23, we have determined the high resolution crystal structure of the mouse peptide N-glycanase catalytic core in complex with the xeroderma pigmentosum group C binding domain from HR23B. Peptide N-glycanase features a large cleft between its catalytic cysteine protease core and zinc binding domain. Opposite the zinc binding domain is the HR23B-interacting region, and surprisingly, the complex interface is fundamentally different from the orthologous yeast peptide N-glycanase-Rad23 complex. Different regions on both proteins are involved in complex formation, revealing an amazing degree of divergence in the interaction between two highly homologous proteins. Furthermore, the mouse peptide N-glycanase-HR23B complex mimics the interaction between xeroderma pigmentosum group C and HR23B, thereby providing a first structural model of how the two proteins interact within the nucleotide excision repair cascade in higher eukaryotes. The different interaction interfaces of the xeroderma pigmentosum group C binding domains in yeast and mammals suggest a co-evolution of the endoplasmic reticulum-associated degradation and DNA repair pathways.Degradation of misfolded and misassembled proteins is essential for homeostasis and cell growth. In the endoplasmic reticulum (ER) 2 a quality control system sorts proteins on the basis of their conformation (1).Proteins that fail to mature in the ER are retro-translocated into the cytosol, polyubiquitinated, and targeted to the proteasome for degradation as part of the ER-associated degradation pathway (2). Defects in the ER-associated degradation system have been associated with many diseases including ␣-1 antitrypsin deficiency, cystic fibrosis, neurodegenerative disorders, tyrosinase deficiency, and cancer (3-6).Most of the misfolded glycoproteins are deglycosylated by a cytosolic peptide-N-glycanase (PNGase) activity before proteasomal degradation (7,8). PNGase hydrolyzes the -aspartylglycosylamine bond of N-linked glycoproteins, which facilitates their degradation by the proteasome (9). PNGase is highly conserved from yeast to human, supporting its functional significance. In addition to the catalytic core, in higher eukaryotes PNGase contains one additional domain each at the N and C terminus, which may function as binding partners for other proteins (10).PNGase closely associates with the proteasome by either directly binding to components of the proteasome or through its interaction with HR23A/HR23B, the mammalian homologs of Ra...