Degradation of nuclear proteins by the 26S proteasome is essential for cell viability. In yeast, the nuclear envelope protein Cut8 mediates nuclear proteasomal sequestration by an uncharacterized mechanism. Here we describe structures of Schizosaccharomyces pombe Cut8, which shows that it contains a unique, modular fold composed of an extended N-terminal, lysine-rich segment that when ubiquitinated binds the proteasome, a dimer domain followed by a six-helix bundle connected to a flexible C tail. The Cut8 six-helix bundle shows structural similarity to 14-3-3 phosphoprotein-binding domains, and binding assays show that this domain is necessary and sufficient for liposome and cholesterol binding. Moreover, specific mutations in the 14-3-3 regions corresponding to putative cholesterol recognition/interaction amino acid consensus motifs abrogate cholesterol binding. In vivo studies confirmed that the 14-3-3 region is necessary for Cut8 membrane localization and that dimerization is critical for its function. Thus, the data reveal the Cut8 organization at the nuclear envelope. Reconstruction of Cut8 evolution suggests that it was present in the last common ancestor of extant eukaryotes and accordingly that nuclear proteasomal sequestration is an ancestral eukaryotic feature. The importance of Cut8 for cell viability and its absence in humans suggests it as a possible target for the development of specific chemotherapeutics against invasive fungal infections.