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The ubiquitin–proteasome system (UPS) and macroautophagy (autophagy) are central to normal proteostasis and interdependent in that autophagy is known to compensate for the UPS to alleviate ensuing proteotoxic stress that impairs cell function. UPS and autophagy dysfunctions are believed to have a major role in the pathomechanisms of neurodegenerative disease. Here we show that continued 26S proteasome dysfunction in mouse brain cortical neurons causes paranuclear accumulation of fragmented dysfunctional mitochondria, associated with earlier recruitment of Parkin and lysine 48-linked ubiquitination of mitochondrial outer membrane (MOM) proteins, including Mitofusin-2. Early events also include phosphorylation of p62/SQSTM1 (p62) and increased optineurin, as well as autophagosomal LC3B and removal of some mitochondria, supporting the induction of selective autophagy. Inhibition of the degradation of ubiquitinated MOM proteins with continued 26S proteasome dysfunction at later stages may impede efficient mitophagy. However, continued 26S proteasome dysfunction also decreases the levels of essential autophagy proteins ATG9 and LC3B, which is characterised by decreases in their gene expression, ultimately leading to impaired autophagy. Intriguingly, serine 351 phosphorylation of p62 did not enhance its binding to Keap1 or stabilise the nuclear factor erythroid 2-related factor 2 (Nrf2) transcription factor in this neuronal context. Nrf2 protein levels were markedly decreased despite transcriptional activation of the Nrf2 gene. Our study reveals novel insights into the interplay between the UPS and autophagy in neurons and is imperative to understanding neurodegenerative disease where long-term proteasome inhibition has been implicated.