The activity of the ubiquitin-proteasome system, UPS, declines during aging in several multicellular organisms. The reason behind this decline remains elusive. Here, using yeast as a model system, we show that while the level and potential capacity of the 26S proteasome is maintained in replicatively aged cells, the UPS is not functioning properly in vivo. As a consequence cytosolic UPS substrates, such as ΔssCPY* are stabilized, accumulate, and form inclusions. By integrating a pGPD-HSP104 recombinant gene into the genome, we were able to constitutively elevate protein disaggregase activity, which diminished the accumulation of protein inclusions during aging. Remarkably, this elevated disaggregation restored degradation of a 26S proteasome substrate in aged cells without elevating proteasome levels, demonstrating that age-associated aggregation obstructs UPS function. The data supports the existence of a negative feedback loop that accelerates aging by exacerbating proteostatic decline once misfolded and aggregation-prone proteins reach a critical level.