In addition to degrading misfolded and damaged proteins, the proteasome regulates the fate of cells in response to stress. The role of the proteasome in pro-inflammatory cytokine-induced human beta-cell apoptosis is unknown. Using INS-1, INS-1E and human islets exposed to combinations of IFNγ, IL-1β and TNFα with or without addition of small molecules, we assessed the role of the immunoproteasome in pancreatic beta-cell demise. Here, we show that cytokines induce the expression and activity of the immuno-proteasome in INS-1E cells and human islets. Cytokine-induced expression of immuno-proteasome subunits, but not activity, depended upon histone deacetylase 3 activation. Inhibition of JAK1/STAT1 signaling did not affect proteasomal activity. Inhibition of the immuno-proteasome subunit PSMB8 aggravated cytokine-induced human beta-cell apoptosis while reducing intracellular levels of oxidized proteins in INS-1 cells. While cytokines increased total cellular NFκB subunit P50 and P52 levels and reduced the cytosolic NFκB subunit P65 and IκB levels, these effects were unaffected by PSMB8 inhibition. We conclude that beta cells upregulate immuno-proteasome expression and activity in response to IFNγ, likely as a protective response to confine inflammatory signaling.