FAT10 is a small ubiquitin-like modifier that is encoded in the major histocompatibility complex and is synergistically inducible by tumor necrosis factor alpha and gamma interferon. It is composed of two ubiquitin-like domains and possesses a free C-terminal diglycine motif that is required for the formation of FAT10 conjugates. Here we show that unconjugated FAT10 and a FAT10 conjugate were rapidly degraded by the proteasome at a similar rate. Fusion of FAT10 to the N terminus of very long-lived proteins enhanced their degradation rate as potently as fusion with ubiquitin did. FAT10-green fluorescent protein fusion proteins were not cleaved but entirely degraded, suggesting that FAT10-specific deconjugating enzymes were not present in the analyzed cell lines. Interestingly, the prevention of ubiquitylation of FAT10 by mutation of all lysines or by expression in ubiquitylation-deficient cells did not affect FAT10 degradation. Thus, conjugation with FAT10 is an alternative and ubiquitin-independent targeting mechanism for degradation by the proteasome, which, in contrast to polyubiquitylation, is cytokine inducible and irreversible.