Amyotrophic lateral sclerosis (ALS) and frontotemporal lobar degeneration (FTLD) are characterized by intraneuronal deposition of the nuclear TAR DNA-binding protein 43 (TDP-43) caused by unknown mechanisms. Here, we studied TDP-43 in primary neurons under different stress conditions and found that only proteasome inhibition by MG-132 or lactacystin could induce significant cytoplasmic accumulation of TDP-43, a histopathological hallmark in disease. This cytoplasmic accumulation was accompanied by phosphorylation, ubiquitination and aggregation of TDP-43, recapitulating major features of disease. Proteasome inhibition produced similar effects in both hippocampal and cortical neurons, as well as in immortalized motor neurons. To determine the contribution of TDP-43 to cell death, we reduced TDP-43 expression using small interfering RNA (siRNA), and found that reduced levels of TDP-43 dose-dependently rendered neurons more vulnerable to MG-132. Taken together, our data suggests a role for the proteasome in subcellular localization of TDP-43, and possibly in disease.