Ubiquitin-specific protease 21 (USP21) is a deubiquitinase implicated in various biological processes and disease states, including cancer. To better understand USP21 protein interaction networks, we used biotin identification proximity labeling, and uncovered USP21 interactions with the cytoskeleton, endosomal, and transcriptional regulators. Notably, a subset of these interactions was modulated by the USP21 selective inhibitor BAY-805. In cells, BAY-805 promoted proximity between USP21 and Kelch like protein KLHL12, a component of the Cullin3 ligase complex. Structural modeling using AlphaFold3, together with hydrogen deuterium exchange mass spectrometry, identified an orthosteric BAY-805 binding site within USP21. Binding of BAY-805 functionally competes with ubiquitin at USP21, thereby enabling USP21 interaction with KLHL12. This BAY-805 induced proximity elicited relocalization of USP21 to KLHL12 containing coat protein complex II (COPII) vesicles. Induced USP21-KLHL12 association led to enlargement of COPII vesicles and impaired transport of large cargoes such as collagen. Overall, our findings reveal a novel chemically induced proximity mechanism in which the monovalent ligand BAY-805 outcompetes ubiquitin from USP21, thereby recruiting USP21 to KLHL12 associated protein complexes.
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