PGP9.5 (UCH-L1) is a member of the ubiquitin C-terminal hydrolase (UCH) family of proteins that is expressed in neuronal tissues. Our previous studies have shown that PGP9.5 was highly expressed in primary lung cancers and lung cancer cell lines. Additionally, the frequency of PGP9.5 over expression increases with tumor stage, indicating that PGP9.5 may play a role in lung cancer tumorigenesis. We used the yeast two-hybrid system to identify proteins that interact with PGP9.5. We show that PGP9.5 interacts with at least three proteins, one of which is JAB1, a Jun activation domain binding protein that can bind to p27(Kip1) and is involved in the cytoplasmic transportation of p27(Kip1) for its degradation. We also show that PGP9.5 is associated with JAB1 in vitro and in vivo; and that both proteins can be a part of a heteromeric complex containing p27(Kip1) in the nucleus in lung cancer cells. Furthermore, under serum-restimulation, nuclear translocation of both PGP9.5 and JAB1 coincides with a reduced level of p27(Kip1) in the nucleus. In contrast, when cells are contact inhibited, both PGP9.5 and JAB1 became more perinuclear and cytoplasmic in localization while p27(Kip1) was present only in the nucleus. Therefore, PGP9.5 may contribute to p27(Kip1) degradation via its interaction and nuclear translocation with JAB1.