26S proteasome is a large multi-subunit protein complex involved in proteolytic degradation of proteins. In addition to its canonical proteolytic activity, the proteasome is also associated with recently characterized endoribonuclease (endo- RNAse) activity. However, neither functional significance, nor the mechanisms of its regulation are currently known. In this report, we show that 26S proteasome is able to hydrolyze various cellular RNAs, including AU-rich mRNA of c-myc and c-fos. The endonucleolytic degradation of these mRNAs is exerted by one of the 26S proteasome subunits, PSMA5 (alpha5). The RNAse activity of 26S proteasome is differentially affected by various extra-cellular signals. Moreover, this activity contributes to the process of degradation of c-myc mRNA during induced differentiation of K562 cells, and may be controlled by phosphorylation of the adjacent subunits, PSMA1 (alpha6) and PSMA3 (alpha7). Collectively, the data presented in this report suggest a causal link between cell signalling pathways, endo-RNAse activity of the 26S proteasome complex and metabolism of cellular RNAs.