In the pursuit of new drug targets and novel drugs, finding a promising remedy for an incurable disease is an unusual feat. This exactly happened recently with the proteasome and its inhibitor, PS-341, which emerged in initial clinical trials as a prospective drug against multiple myeloma. The proteasome is the major executor of a tightly regulated nonlysosomal proteolysis in human cells and constitutes an attractive target for the development of drugs against cancer, autoimmune diseases, muscle wasting, inflammation and stroke. Synthetic peptide derivatives: boronates, epoxides, aldehydes, vinyl sulfones, cyclic peptides and lactones are tested for their in vivo and in vitro performance. These compounds block the N-terminal threonine-type active centers of the enzyme, halting cleavage of all proteasomal substrates in the cell and triggering apoptosis. Apparently, cancer cells are more susceptible than normal cells to such drastic treatment. The great advantage of competitive proteasome inhibitors as drugs derives from the apparent lack of drug-induced resistance. On the other hand, there is an emerging field of noncompetitive inhibitors targeting allosteric interactions between proteasomal subunits and offering a great potential of precise interventions into the cellular physiology. One of such inhibitors, a natural antibacterial peptide PR-39, has been shown recently to specifically block activation of a major transcription factor, NFkB, by the proteasome, and degradation of a regulator of oxygen distribution, HIF-1α, without affecting a gross intracellular protein catabolism. PR-39 and its derivatives are promising antiinflammatory agents and regulators of angiogenesis. Rational design of competitive and allosteric effectors of the proteasome is the challenge pursued by combined efforts of chemists and biologists.