The Saccharomyces cerevisiae Gal4 protein is a paradigmatic transcriptional activator containing a C-terminal acidic activation domain (AD) of 34 amino acids. A mutation that results in the truncation of about two-thirds of the Gal4AD (gal4D) results in a crippled protein with only 3% the activity of the wild-type activator. We show here that although the Gal4D protein is not intrinsically deficient in DNA binding, it is nonetheless unable to stably occupy GAL promoters in vivo. This is because of the activity of the proteasomal ATPases, including Sug1/Rpt6, which bind to Gal4D via the remainder of the AD and strip it off of DNA. A mutation that suppressed the Gal4D "no growth on galactose" phenotype repressed the stripping activity of the ATPase complex but not other activities. We further demonstrate that Gal4D is hypersensitive to this stripping activity because of its failure to be monoubiquitylated efficiently in vivo and in vitro. Evidence is presented that the piece of the AD that is deleted in Gal4D protein is likely a recognition element for the E3 ubiquitin-protein ligase that modifies Gal4. These data argue that acidic ADs comprise at least two small peptide subdomains, one of which is responsible for activator monoubiquitylation and another that interacts with the proteasomal ATPases, coactivators and other transcription factors. This study validates the physiological importance of Gal4 monoubiquitylation and clarifies its major role as that of protecting the activator from being destabilized by the proteasomal ATPases.