Dysfunction of protein handling has been implicated in many neurodegenerative diseases and inhibition of the ubiquitin-proteasome system (UPS) has been linked to the formation of protein aggregates and proteinopathies in such diseases. While proteasomal inhibition could trigger an array of downstream protein handling changes including up-regulation of heat shock proteins (HSPs), induction of molecular chaperones, activation of the ER stress/unfolded protein response (UPR), autophagy and aggresome formation, little is known of the relationship of proteasomal inhibition to the sequence of activation of these diverse protein handling systems. In this study we utilized the reversible proteasome inhibitor MG132 and examined the activity of several major protein handling systems in the immortalized dopaminergic neuronal N27 cell line. In the early phase (up to 6h after proteasomal inhibition), MG132 induced time-dependent proteasomal inhibition which resulted in stimulation of the UPR, increased autophagic flux and stimulated heat shock protein response as determined by increased levels of phosphorylation of the eukaryotic translation initiation factor 2 alpha (eIF2α), C/EBP homologous protein (CHOP)/GADD153, turnover of autophagy related microtubule-associated protein 1 light chain 3 (LC3) and increased levels of Hsp70 respectively. After prolonged proteasomal inhibition induced by MG132, we observed the formation of vimentin-caged aggresome-like inclusion bodies. A recovery study after MG132-induced proteasomal inhibition indicated that the autophagy-lysosomal pathway participated in the clearance of aggresomes. Our data characterizes the relationship between proteasome inhibition and activation of other protein handling systems. These data also indicated that the induction of alternate protein handling systems and their temporal relationships may be important factors that determine the extent of accumulation of misfolded proteins in cells as a result of proteasome inhibition.