The proteasome, the primary protease for ubiquitin-dependent proteolysis in eukaryotes, is usually found as a mixture of 30S, 26S, and 20S complexes. We found conditions in both mammalian cell lines and yeast cultures that result in the uncoupling of 26S holoenzymes liberating intact 20S. These complexes have common catalytic sites, which makes it challenging to determine their distinctive roles in intracellular proteolysis. To distinguish between the characteristics of 20S and 26S proteasomes, we used chemically synthesized homogenously ubiquitinated proteins and tested them with purified mammalian 26S and 20s proteasomes. By comparing their action of these two enzymes on a panel of substrates, we delineate their signature activities with respect to substrate selection and peptide-product generation. Intracellular peptidomics identifies proteasome-trapped peptides of potential substrates. Conditions that promote elevated 20S proteasome species over 26S, consistently exhibit the 20S signature properties that we outlined with purified enzymatic complexes in vitro, providing evidence for a role of 20S as a stand-alone protease in cells. Moreover, elevated levels of 20S proteasomes appear to contribute to better cell survival under stress associated with misfolded/damaged proteins some of which may be ubiquitinated under these conditions. Subcomplex affinity-purification and quantitative mass spectrometry exposed the role of a proteasome adaptor and scaffold protein that is crucial for driving proteasome populations between 26S and 20S subspecies under certain metabolic conditions. Collectively, our results indicate a novel mechanism adapting global proteolysis in physiological needs and an effective cellular strategy against proteotoxic stress.