The ubiquitin-proteasome system (UPS) is an important proteolytic machinery regulating cellular homeostasis by affecting the post-translational modification and disposal of worn-out and damaged proteins from the cell. It has evolved as an important mechanism in neurodegeneration as it has been vitally involved in regulating protein misfolding involved in neurodegenerative disorders, such as amyloid-β, presenilin-1 (Alzheimer’s disease), α-Synuclein, parkin (Parkinson’s disease), Huntingtin (Huntington’s disease), and Pick’s disease, which is associated with ubiquitylated inclusions. Aging is said to play an important role in this neurodegenerative peptide aggregation and declining proteasomal activity, further aggravating the disease pathology. E3-ligase in the entire ubiquitination machinery plays a critical role in protein misfolding and associated pathology. Immune system activation due to this misfolded protein becomes the principal instigator of neuroinflammatory processes. Here, we tried to summarize the protein misfolding-mediated UPS activation and neuroinflammation occurring in various neurodegenerative diseases and recent advances in therapeutic targeting of UPS machinery in neurodegenerative disorders.