The mammalian and yeast unfolded protein responses (UPR) share the characteristic of rapid elimination of unspliced Xbp-1 (Xbp-1u) and unspliced Hac1p, respectively. These polypeptides derive from mRNAs, whose splicing is induced upon onset of the UPR, so as to allow synthesis of transcription factors essential for execution of the UPR itself. Whereas in yeast translation of unspliced Hac1p is blocked, mammalian Xbp-1u is synthesized constitutively and eliminated by rapid proteasomal degradation. Here we show that the rate of Xbp-1u degradation approaches its rate of synthesis. The C terminus of XBP-1u ensures its trafficking to the cytoplasm, and is sufficient to impose rapid degradation. Degradation of XBP-1u involves both ubiquitin-dependent and ubiquitin-independent mechanisms, which might explain its unusually rapid turnover. Xbp-1-/- mouse embryonic fibroblasts reconstituted with mutants of XBP-1u that show improved stability differentially activate UPR target genes. Unexpectedly, we found that one of the mutants activates transcription of both Xbp-1-specific and non-Xbp-1-dependent UPR targets in response to tunicamycin treatment, even more potently than does wild type Xbp-1. We suggest that the degradation of Xbp-1u is required to prevent uncontrolled activation of the UPR while allowing short dwell times for initiation of this response.