Updated project metadata. When faced with proteotoxic stress, cells mount adaptive responses to eliminate aberrant proteins. Adaptive responses enhance the cellular quality control machinery by increasing expression of protein folding and degradation factors, but it is unclear if and how this augmented machinery acquires new activities during stress. Here, we uncover a regulatory cascade in budding yeast that consists of the hydrophilin protein Roq1, the HtrA protease Ynm3 and the ubiquitin ligase Ubr1. Various stresses stimulate ROQ1 transcription. The Roq1 protein is cleaved by Ynm3. Cleaved Roq1 allosterically regulates Ubr1, transforming its substrate specificity. Altered substrate recognition by Ubr1 accelerates proteasomal degradation of misfolded and native proteins at the endoplasmic reticulum membrane and in the cytosol. We term this pathway stress-induced homeostatically regulated protein degradation (SHRED) and propose that it promotes physiological adaptation by reprogramming a key component of the cellular quality control machinery.