We isolated a temperature-sensitive mutant, hrd4-1, deficient in ER-associated degradation (ERAD). The HRD4 gene was identical to NPL4, a gene previously implicated in nuclear transport. Using a diverse set of substrates and direct ubiquitination assays, our analysis revealed that HRD4/NPL4 is required for a poorly characterized step in ERAD after ubiquitination of target proteins but before their recognition by the 26S proteasome. Our data indicate that this lack of proteasomal processing of ubiquitinated proteins constitutes the primary defect in hrd4/npl4 mutant cells and explains the diverse set of hrd4/npl4 phenotypes. We also found that each member of the Cdc48p-Ufd1p-Npl4p complex is individually required for ERAD.