The 26S proteasome, a multisubunit complex, is the primary protease of the ubiquitin-mediated proteolytic system in eukaryotes. We have recently characterized MCB1 (RPN10), a subunit of the 26S complex that has affinity for multiubiquitin chains in vitro and as a result may function as a receptor for ubiquitinated substrates. To define the role of MCB1 further, we analyzed its function in Physcomitrella patens by generating MCB1 gene disruptions using homologous recombination. PpMCB1, which is 50 to 75% similar to orthologs from other eukaryotes, is present in the 26S proteasome complex and has a similar affinity for multiubiquitin chains, using a conserved hydrophobic domain within the C-terminal half of the polypeptide. Unlike yeast Deltamcb1 strains, which grow normally, P. patens Deltamcb1 strains are viable but are under developmental arrest, generating abnormal caulonema that are unable to form buds and gametophores. Treatment with auxin and cytokinin restored bud formation and subsequent partial development of gametophores. Complementation of a Deltamcb1 strain with mutated versions of PpMCB1 revealed that the multiubiquitin chain binding site is not essential for the wild-type phenotype. These results show that MCB1 has an important function in the 26S proteasome of higher order eukaryotes in addition to its ability to bind multiubiquitin chains, and they provide further support for a role of the ubiquitin/26S proteasome proteolytic pathway in plant developmental processes triggered by hormones.