Monoubiquitination aids in the nuclear export and entrance of proteins into the lysosomal degradative pathway, although the mechanisms are unknown. Cytidylyltransferase (CCTalpha) is a proteolytically sensitive lipogenic enzyme containing an NH(2)-terminal nuclear localization signal (NLS). We show here that CCTalpha is monoubiquitinated at a molecular site (K(57)) juxtaposed near its NLS, resulting in disruption of its interaction with importin-alpha, nuclear exclusion, and subsequent degradation within the lysosome. Cellular expression of a CCTalpha-ubiquitin fusion protein that mimics the monoubiquitinated enzyme resulted in cytoplasmic retention. A CCTalpha K(57R) mutant exhibited an extended half-life, was retained in the nucleus, and displayed proteolytic resistance. Importantly, by using CCTalpha-ubiquitin hybrid constructs that vary in the intermolecular distance between ubiquitin and the NLS, we show that CCTalpha monoubiquitination masks its NLS, resulting in cytoplasmic retention. These results unravel a unique molecular mechanism whereby monoubiquitination governs the trafficking and life span of a critical regulatory enzyme in vivo.