Pex5p is a mobile receptor for peroxisomal targeting signal type I-containing proteins that cycles between the cytoplasm and the peroxisome. Here we show that Pex5p is a stable protein that is monoubiquitinated in wild type cells. By making use of mutants defective in vacuolar or proteasomal degradation we demonstrate that monoubiquitinated Pex5p is not a breakdown intermediate of either system. Monoubiquitinated Pex5p is localized to peroxisomes, and ubiquitination requires the presence of functional docking and RING finger complexes, which suggests that it is a late event in peroxisomal matrix protein import. In pex1, pex4, pex6, pex15, and pex22 mutants, all of which are blocked in the terminal steps of peroxisomal matrix protein import, polyubiquitinated forms of Pex5p accumulate, ubiquitination being dependent on the ubiquitin-conjugating enzyme Ubc4p. However, Ubc4p is not required for Pex5p ubiquitination in wild type cells, and cells lacking Ubc4p are not affected in peroxisome biogenesis. These results indicate that Pex5p monoubiquitination in wild type cells serves to regulate rather than to degrade Pex5p, which is supported by the observed stability of Pex5p. We propose that Pex5p monoubiquitination in wild type cells is required for the recycling of Pex5p from the peroxisome, whereas Ubc4p-mediated polyubiquitination of Pex5p in mutants blocked in the terminal steps of peroxisomal matrix protein import may function as a disposal mechanism for Pex5p when it gets stuck in the import pathway.