The ATPase associated with various cellular activities p97 has a critical function in the cytoplasmic degradation of proteins misfolded in the ER (endoplasmic reticulum) through a mechanism known as ERAD (ER-associated degradation). During this process, p97 binds polyubiquitinated ERAD substrates and couples ATP hydrolysis to their dislocation from the ER as a prerequisite to destruction by the proteasome. The ubiquitin signals important for this process are not fully understood. In the present paper we report that p97 interacts with Lys11- and Lys48-linked ubiquitin polymers, but not those containing Lys63 linkages. Disruption of p97 through siRNA-mediated depletion, dominant-negative overexpression or chemical inhibition results in the accumulation of Lys11 and Lys48 ubiquitin chains predominantly at the ER membrane, and is associated with ER stress induction. We show that a catalytically inactive deubiquitinating enzyme and p97 cofactor YOD1 enhances the accumulation of Lys11- and Lys48-linked polyubiquitin in the cytoplasm, at the ER membrane and bound to p97. In addition to general effects on p97-associated ubiquitin polymers, the ERAD substrate CD3δ is modified with both Lys11 and Lys48 ubiquitin chains prior to p97-dependent dislocation. Collectively, the results of the present study are consistent with a major role for p97 in the recognition of Lys11 and Lys48 polyubiquitinated proteins before their degradation by the proteasome.