Protein ubiquitination and proteasome-mediated degradation lie at the heart of most essential cellular processes, ranging from apoptosis to cell cycle regulation, protein trafficking, antigen processing and transcriptional regulation. Gene transcription in particular is controlled both positively and negatively by a wide variety of enzymes of the ubiquitin/proteasome system. This system sets the stage for assembly of the transcriptional pre-initiation complex by stimulating histone modifications and recruiting chromatin remodelling activities which promote its reconfiguration. The ubiquitin/proteasome system plays a central role in both transcriptional initiation and elongation, the former through recruitment of RNA polymerase II, the latter by promoting promoter clearance. Moreover, this system is actively involved in degradation of RNA polymerase II as part of a process termed transcription coupled repair, which ensures that transcription pauses when the polymerase encounters lesions in the DNA which is being transcribed. Transcriptional activators and repressors are key targets of both proteolytic and non-proteolytic activities which control their fate by controlling their relative abundance and/or their  localization, activity or availability. More recent studies report co-immunoprecipitation of proteasomal subunits with transcriptional complexes at gene promoters, and there is growing evidence for a non-proteolytic function of the proteasome in transcription. In this review we describe how the ubiquitin/proteasome system is involved in chromatin reconfiguration and assembly of the transcriptional pre-initiation complex and discuss the different proteolytic and non-proteolytic mechanisms through which this system impinges on transcriptional activators, RNA polymerase II and ultimately promotes transcriptional initiation and elongation.