Ubiquitin conjugation during endoplasmic-reticulum-associated degradation (ERAD) depends on the activity of Ubc7. Here we show that Ubc1 acts as a further ubiquitin-conjugating enzyme in this pathway. Absence of both enzymes results in marked stabilization of an ERAD substrate and induction of the unfolded-protein response (UPR). Furthermore, basic ERAD activity is sufficient to eliminate unfolded proteins under normal conditions. However, when stress is applied, the UPR is required to increase ERAD activity. We thus demonstrate, for the first time, a regulatory loop between ERAD and the UPR, which is essential for normal growth of yeast cells.