The epithelial Na+ channel (ENaC), composed of three subunits (alpha beta gamma), plays a critical role in salt and fluid homeostasis. Abnormalities in channel opening and numbers have been linked to several genetic disorders, including cystic fibrosis, pseudohypoaldosteronism type I and Liddle syndrome. We have recently identified the ubiquitin-protein ligase Nedd4 as an interacting protein of ENaC. Here we show that ENaC is a short-lived protein (t1/2 approximately 1 h) that is ubiquitinated in vivo on the alpha and gamma (but not beta) subunits. Mutation of a cluster of Lys residues (to Arg) at the N-terminus of gamma ENaC leads to both inhibition of ubiquitination and increased channel activity, an effect augmented by N-terminal Lys to Arg mutations in alpha ENaC, but not in beta ENaC. This elevated channel activity is caused by an increase in the number of channels present at the plasma membrane; it represents increases in both cell-surface retention or recycling of ENaC and incorporation of new channels at the plasma membrane, as determined by Brefeldin A treatment. In addition, we find that the rapid turnover of the total pool of cellular ENaC is attenuated by inhibitors of both the proteasome and the lysosomal/endosomal degradation systems, and propose that whereas the unassembled subunits are degraded by the proteasome, the assembled alpha beta gamma ENaC complex is targeted for lysosomal degradation. Our results suggest that ENaC function is regulated by ubiquitination, and propose a paradigm for ubiquitination-mediated regulation of ion channels.