The ability of transcriptional activation domains (TADs) to signal ubiquitin-mediated proteolysis suggests an involvement of the ubiquitin-proteasome pathway in transcription. To probe this involvement, we asked how ubiquitylation regulates the activity of a transcription factor containing the VP16 TAD. We show that the VP16 TAD signals ubiquitylation through the Met30 ubiquitin-ligase and that Met30 is also required for the VP16 TAD to activate transcription. The requirement for Met30 in transcription is circumvented by fusion of ubiquitin to the VP16 activator, demonstrating that activator ubiquitylation is essential for transcriptional activation. We propose that ubiquitylation regulates TAD function by serving as a dual signal for activation and activator destruction.