Aging is attended by a progressive decline in protein homeostasis (proteostasis), aggravating the risk for protein aggregation diseases. To understand the coordination between proteome imbalance and longevity, we addressed the mechanistic role of the quality-control ubiquitin ligase CHIP, which is a key regulator of proteostasis. We observed that CHIP deficiency leads to increased levels of the insulin receptor (INSR) and reduced lifespan of worms and flies. The membrane-bound INSR regulates the insulin and IGF1 signaling (IIS) pathway and thereby defines metabolism and aging. INSR is a direct target of CHIP, which triggers receptor monoubiquitylation and endocytic-lysosomal turnover to promote longevity. However, upon proteotoxic stress conditions and during aging, CHIP is recruited toward disposal of misfolded proteins, reducing its capacity to degrade the INSR. Our study indicates a competitive relationship between proteostasis and longevity regulation through CHIP-assisted proteolysis, providing a mechanistic concept for understanding the impact of proteome imbalance on aging.