Signal peptide peptidase functions in ERAD to cleave the unfolded protein response regulator XBP1u

Signal peptide peptidase (SPP) catalyzes intramembrane proteolysis of signal peptides at the endoplasmic reticulum (ER), but has also been suggested to play a role in ER‐associated degradation (ERAD). Here, we show that SPP forms a complex with the ERAD factor Derlin1 and the E3 ubiquitin ligase TRC8 to cleave the unfolded protein response (UPR) regulator XBP1u. Cleavage occurs within a so far unrecognized type II transmembrane domain, which renders XBP1u as an SPP substrate through specific sequence features. Additionally, Derlin1 acts in the complex as a substrate receptor by recognizing the luminal tail of XBP1u. Remarkably, this interaction of Derlin1 with XBP1u obviates the need for ectodomain shedding prior to SPP cleavage, commonly required for intramembrane cuts. Furthermore, we show that XBP1u inhibits the UPR transcription factor XBP1s by targeting it toward proteasomal degradation. Thus, we identify an ERAD complex that controls the abundance of XBP1u and thereby tunes signaling through the UPR. Synopsis Signal peptide peptidase (SPP), an intramembrane protease involved in ER signal peptide cleavage, functions in a previously unrecognized ERAD branch, catalyzing proteolysis of the unfolded protein response (UPR) regulator XPB1u in complex with Derlin1 and TRC8. The unspliced UPR regulator XBP1u contains a previously unrecognized type II transmembrane domain. XBP1u is released from the ER membrane by SPP‐catalyzed cleavage and degraded by the proteasome in a p97‐independent manner. Association with rhomboid pseudoprotease Derlin1 and E3 ligase TRC8 primes SPP for XBP1u cleavage. Instable transmembrane helix but not ectodomain size renders XBP1u for SPP‐catalyzed cleavage. XBP1u inhibits the active UPR transcription factor XBP1s by tethering it to the ER and targeting it for degradation. Graphical Abstract SPP, an intramembrane protease involved in ER signal peptide cleavage, functions in a novel ERAD branch to catalyze proteolysis of the unfolded protein response (UPR) regulator XPB1u in complex with Derlin1 and TRC8.