The proteasome was first identified as a high MW protease complex that gets resolved into a series of low MW protein species upon denaturation. As the dominant protease dedicated to protein turnover, the proteasome shapes the cellular protein repertoire. Our knowledge of proteasome regulation and activity has improved considerably over the past decade. Novel inhibitors, in particular, have helped to advance our understanding of proteasome biology. They range from small peptide-based structures that can be modified to vary target specificity to large macromolecular inhibitors that include proteins. Although these reagents have an important role in establishing our current knowledge of the proteasome's catalytic mechanism, many questions remain. The future lies in designing compounds that can function as drugs to target processes involved in disease progression. Our focus in this chapter is to highlight the use of various classes of inhibitors to probe the mechanism of the proteasome and to identify its physiological significance in the cell, so that the mechanism of inhibition of proteasome will work as a definite source for design of protocols for newer therapeutic agents for the treatment of inflammation and in cancer therapy.