The interplay between molecular chaperones, ubiquitin/deubiquitinating enzymes, and proteasomes is a critical element in protein homeostasis. Among these factors, the conserved deubiquitinase, Ubp3, has the interesting ability, when overproduced, to suppress the requirement for the major cytosolic Hsp70 chaperones. Here, we show that Ubp3 overproduction counteracts deficiency of Hsp70s by the removal of damaged proteins deposited in inclusion bodies (JUNQ) during both aging and heat stress. Consistent with this, Ubp3 destabilized, deubiquitinated, and diminished the toxicity of the JUNQ-associated misfolded protein Ubc9(ts) in a proteasome-dependent manner. In contrast, another misfolded model protein, ssCPY*, was stabilized by Ubp3-dependent deubiquitination demonstrating a dual role for Ubp3, saving or destroying aberrant protein species depending on the stage at which the damaged protein is committed for destruction. We present genetic evidence for the former of these activities being key to Ubp3-dependent suppression of heat sensitivity in Hsp70-deficient cells, whereas protein destruction suppresses accelerated aging. We discuss the data in view of how heat stress and aging might elicit differential damage and challenges on the protein homeostasis network.