The ubiquitin-proteasome system is essential for maintaining protein homeostasis. However, proteasome dysregulation in chronic diseases is poorly understood. Through genome-wide cell-based screening using 5,500 cDNAs, a signaling pathway leading to NFκB activation was selected as an inhibitor of 26S proteasome. TNF-α increased S5b (HGNC symbol PSMD5; hereafter S5b/PSMD5) expression via NFκB, and the surplus S5b/PSMD5 directly inhibited 26S proteasome assembly and activity. Downregulation of S5b/PSMD5 abolished TNF-α-induced proteasome inhibition. TNF-α enhanced the interaction of S5b/PSMD5 with S7/PSMC2 in nonproteasome complexes, and interference of this interaction rescued TNF-α-induced proteasome inhibition. Transgenic mice expressing S5b/PSMD5 exhibited a reduced life span and premature onset of aging-related phenotypes, including reduced proteasome activity in their tissues. Conversely, S5b/PSMD5 deficiency in Drosophila melanogaster ameliorated the tau rough eye phenotype, enhanced proteasome activity, and extended the life span of tau flies. These results reveal the critical role of S5b/PSMD5 in negative regulation of proteasome by TNF-α/NFκB and provide insights into proteasome inhibition in human disease.