The latent membrane protein 1 (LMP1) of the Epstein-Barr virus is a constitutively active receptor essential for B lymphocyte transformation by the Epstein-Barr virus. It is a short-lived protein, but the proteolytic pathway involved in its degradation is not known. The ubiquitin pathway is a major system for specific protein degradation in eukaryotes. Most plasma membrane substrates of the pathway are internalized upon ubiquitination and delivered for degradation in the lysosome/vacuole. Here we show that LMP1 is a substrate of the ubiquitin pathway and is ubiquitinated both in vitro and in vivo. However, in contrast to other plasma membrane substrates of the ubiquitin system, it is degraded mostly by the proteasome and not by lysosomes. Degradation is independent of the single Lys residue of the protein; a lysine-less mutant LMP1 is degraded in a ubiquitin- and proteasome-dependent manner similar to the wild type protein. Degradation of both wild type and lysine-less protein is sensitive to fusion of a Myc tag to the N terminus of LMP1. In addition, deletion of as few as 12 N-terminal amino acid residues stabilizes the protein. These findings suggest that the first event in LMP1 degradation is attachment of ubiquitin to the N-terminal residue of the protein. We present evidence suggesting that phosphorylation is also required for degradation of LMP1.