Protein degradation by the ubiquitin-proteasome system is central to cell homeostasis and survival. Defects in this process are associated with diseases such as cancer and neurodegenerative disorders. The 26S proteasome is a large protease complex that degrades ubiquitinated proteins. Here, we show that ADP-ribosylation promotes 26S proteasome activity in both Drosophila and human cells. We identify the ADP-ribosyltransferase tankyrase (TNKS) and the 19S assembly chaperones dp27 and dS5b as direct binding partners of the proteasome regulator PI31. TNKS-mediated ADP-ribosylation of PI31 drastically reduces its affinity for 20S proteasome α subunits to relieve 20S repression by PI31. Additionally, PI31 modification increases binding to and sequestration of dp27 and dS5b from 19S regulatory particles, promoting 26S assembly. Inhibition of TNKS by either RNAi or a small-molecule inhibitor, XAV939, blocks this process to reduce 26S assembly. These results unravel a mechanism of proteasome regulation that can be targeted with existing small-molecule inhibitors.