Protein degradation in eukaryotic cells is mainly carried out by the 26S proteasome, a macromolecular complex not only present in the cytosol and nucleus but also associated with various membranes. How proteasomes are anchored to the membrane and the biological meaning thereof have been largely unknown in higher organisms. Here, we show that N-myristoylation of the Rpt2 subunit is a general mechanism for proteasome-membrane interaction. Loss of this modification in the Rpt2-G2A mutant cells leads to profound changes in the membrane-associated proteome, perturbs the endomembrane system, and undermines critical cellular processes such as cell adhesion, endoplasmic reticulum-associated degradation and membrane protein trafficking. Rpt2G2A/G2A homozygous mutation is embryonic lethal in mice and is sufficient to abolish tumor growth in a nude mice xenograft model. These findings have defined an evolutionarily conserved mechanism for maintaining membrane protein homeostasis and underscored the significance of compartmentalized protein degradation by myristoyl-anchored proteasomes in health and disease.