Id proteins negatively regulate the dimerization, DNA binding, and biological properties of basic helix-loop-helix proteins. In a search for novel factors that interact with Id1, we identified a component of the 26 S proteasome, S5a, that has previously been implicated only in the recognition of ubiquitinated polypeptides destined for proteolysis. S5a interacts strongly with Id1, less strongly with the basic helix loop-helix proteins MyoD and E12, and not at all with other Id proteins. S5a restores DNA binding by MyoD-Id1 and E12-Id1 heterodimers, enhances DNA binding by MyoD and E12 homodimers, and reverses Id1-mediated repression of the muscle creatine kinase promoter during myogenic differentiation. Mutagenesis experiments showed that amino acids flanking the helix-loop-helix domain plus three residues in the first helix of Id1 impart S5a recognition. This requires only the NH2-terminal half of S5a. S5a thus appears to promote the positive regulation of myogenic genes through ubiquitin-independent mechanisms involving inhibition of Id1 and the enhancement of DNA binding by MyoD and E12. This latter property may permit the selection of novel promoter binding sites during myogenesis.