The immunoproteasome is a highly efficient proteolytic machinery derived from the constitutive proteasome and is abundantly expressed in immune cells. The immunoproteasome plays a critical role in the immune system because it degrades intracellular proteins, for example, those of viral origin, into small proteins. They are further digested into short peptides to be presented by major histocompatibility complex (MHC) class I molecules. In addition, the immunoproteasome influences inflammatory disease pathogenesis through its ability to regulate T cell polarization. The immunoproteasome is also expressed in nonimmune cell types during inflammation or neoplastic transformation, supporting a role in the pathogenesis of autoimmune diseases and neoplasms. Following the success of inhibitors of the constitutive proteasome, which is now an established treatment modality for multiple myeloma, compounds that selectively inhibit the immunoproteasome are currently under active investigation. This paper will review the functions of the immunoproteasome, highlighting areas where novel pharmacological treatments that regulate immunoproteasome activity could be developed.