The maintenance of cellular proteins in a biologically active and structurally stable state is a vital endeavor involving multiple cellular pathways. One such pathway is the ubiquitin-proteasome system that represents a major route for protein degradation, and reductions in this pathway usually have adverse effects on the health of cells and tissues. Here, we demonstrate that loss-of-function mutants of the Caenorhabditis elegans proteasome subunit, RPN-10, exhibit moderate proteasome dysfunction and unexpectedly develop both increased longevity and enhanced resistance to multiple threats to the proteome, including heat, oxidative stress, and the presence of aggregation prone proteins. The rpn-10 mutant animals survive through the activation of compensatory mechanisms regulated by the conserved SKN-1/Nrf2 and ELT-2/GATA transcription factors that mediate the increased expression of genes encoding proteasome subunits as well as those mediating oxidative- and heat-stress responses. Additionally, we find that the rpn-10 mutant also shows enhanced activity of the autophagy-lysosome pathway as evidenced by increased expression of the multiple autophagy genes including atg-16.2, lgg-1, and bec-1, and also by an increase in GFP::LGG-1 puncta. Consistent with a critical role for this pathway, the enhanced resistance of the rpn-10 mutant to aggregation prone proteins depends on autophagy genes atg-13, atg-16.2, and prmt-1. Furthermore, the rpn-10 mutant is particularly sensitive to the inhibition of lysosome activity via either RNAi or chemical means. We also find that the rpn-10 mutant shows a reduction in the numbers of intestinal lysosomes, and that the elt-2 gene also plays a novel and vital role in controlling the production of functional lysosomes by the intestine. Overall, these experiments suggest that moderate proteasome dysfunction could be leveraged to improve protein homeostasis and organismal health and longevity, and that the rpn-10 mutant provides a unique platform to explore these possibilities.