ATP-dependent proteolysis in reticulocyte extracts is stimulated by ubiquitin, a polypeptide which is covalently conjugated to proteins. It has been proposed that ATP and ubiquitin act by repressing an inhibitor of an ATP-independent protease, rather than by conjugation to substrate proteins [Speiser, S. and Etlinger, J.D. (1983) Proc. Natl. Acad. Sci. U.S.A. 80, 3577-3580]. We find that the inhibitor preparation used by these authors contains a positively required factor of the ATP-ubiquitin proteolytic system, which can be separated from two types of protease inhibitors by gel filtration chromatography. The following observations indicate that the "inhibitors" are endogenous protease substrates which compete with the labeled substrate: (a) inhibition is competitive with exogenous substrate; (b) inhibition is abolished by a preincubation of "inhibitor" with protease prior to the addition of labeled substrate. These findings are not consistent with the notion that the inhibitors play a regulatory role in the ATP-ubiquitin proteolytic pathway.