Proteasome inhibitors are used to treat blood cancers such as multiple myeloma (MM) and mantle cell lymphoma. The efficacy of these drugs is frequently undermined by acquired resistance. One mechanism of proteasome inhibitor resistance may involve the transcription factor Nuclear Factor, Erythroid 2 Like 1 (NFE2L1, also referred to as Nrf1), which responds to proteasome insufficiency or pharmacological inhibition by upregulating proteasome subunit gene expression. This "bounce-back" response is achieved through a unique mechanism. Nrf1 is constitutively translocated into the ER lumen, N-glycosylated, and then targeted for proteasomal degradation via the ER-associated degradation (ERAD) pathway. Proteasome inhibition leads to accumulation of cytosolic Nrf1, which is then processed to form the active transcription factor. Here we show that the cytosolic enzyme N-glycanase 1 (NGLY1, the human PNGase) is essential for Nrf1 activation in response to proteasome inhibition. Chemical or genetic disruption of NGLY1 activity results in the accumulation of misprocessed Nrf1 that is largely excluded from the nucleus. Under these conditions, Nrf1 is inactive in regulating proteasome subunit gene expression in response to proteasome inhibition. Through a small molecule screen, we identified a cell-active NGLY1 inhibitor that disrupts the processing and function of Nrf1. The compound potentiates the cytotoxicity of carfilzomib, a clinically used proteasome inhibitor, against MM and T cell-derived acute lymphoblastic leukemia (T-ALL) cell lines. Thus, NGLY1 inhibition prevents Nrf1 activation and represents a new therapeutic approach for cancers that depend on proteasome homeostasis.