The N-end rule pathway is a proteolytic system in which N-terminal residues of short-lived proteins are recognized by recognition components (N-recognins) as essential components of degrons, called N-degrons. Known N-recognins in eukaryotes mediate protein ubiquitylation and selective proteolysis by the 26S proteasome. Substrates of N-recognins can be generated when normally embedded destabilizing residues are exposed at the N terminus by proteolytic cleavage. N-degrons can also be generated through modifications of posttranslationally exposed pro-N-degrons of otherwise stable proteins; such modifications include oxidation, arginylation, leucylation, phenylalanylation, and acetylation. Although there are variations in components, degrons, and hierarchical structures, the proteolytic systems based on generation and recognition of N-degrons have been observed in all eukaryotes and prokaryotes examined thus far. The N-end rule pathway regulates homeostasis of various physiological processes, in part, through interaction with small molecules. Here, we review the biochemical mechanisms, structures, physiological functions, and small-molecule-mediated regulation of the N-end rule pathway.