Alzheimer's disease (AD) is the major age-associated form of dementia characterized by gradual cognitive decline. Aberrant cleavage of the amyloid-β protein precursor (AβPP) is thought to play an important role in the pathology of this disease. Two principal AβPP processing pathways exist: amyloidogenic cleavage of AβPP resulting in production of the soluble N-terminal fragment sAβPPβ, amyloid-β (Aβ), which accumulates in AD brain, and the AβPP intracellular domain (AICD) sAβPPα, p3 and AICD are generated in the non-amyloidogenic pathway. Prevalence of amyloidogenic versus non-amyloidogenic processing leads to depletion of sAβPPα and an increase in Aβ. Although sAβPPα is a well-accepted neurotrophic protein, molecular effects of this fragment remains unknown. Different studies reported impaired protein degradation pathways in AD brain, pointing to a role of disturbed proteasomal activity in the pathogenesis of this disease. Here we studied the possible role of sAβPPα in Bag3-mediated selective macroautophagy and proteasomal degradation. Employing human IMR90 cells, HEK 293 cells, and primary neurons, we demonstrate that sAβPPα prevents the proteotoxic stress-induced increase of Bag3 at the protein and at the mRNA level indicating a transcriptional regulation. Intriguingly, p62 and LC3, two other key players of autophagy, were not affected. Moreover, the formation and the accumulation of disease-related protein aggregates were significantly reduced by sAβPPα. Interestingly, there was a significant increase of proteasomal activity by sAβPPα as demonstrated by using various proteasome substrates. Our findings demonstrate that sAβPPα modulates Bag3 expression, aggresome formation, and proteasomal activity, thereby providing first evidence for a function of sAβPPα in the regulation of proteostasis.