Protein-O-linked N-Acetyl-β-D-glucosaminidase (O-GlcNAcase, OGA; also known as hexosaminidase C) participates in a nutrient-sensing, hexosamine signaling pathway by removing O-linked N-acetylglucosamine (O-GlcNAc) from key target proteins. Perturbations in O-GlcNAc signaling have been linked to Alzheimer's disease, diabetes and cancer. Mammalian O-GlcNAcase exists as two major spliced isoforms differing only by the presence (OGA-L) or absence (OGA-S) of a histone-acetyltransferase domain. Here we demonstrate that OGA-S accumulates on the surface of nascent lipid droplets with perilipin-2; both of these proteins are stabilized by proteasome inhibition. We show that selective downregulation of OGA-S results in global proteasome inhibition and the striking accumulation of ubiquitinylated proteins. OGA-S knockdown increased levels of perilipin-2 and perilipin-3 suggesting that O-GlcNAc-dependent regulation of proteasomes might occur on the surface of lipid droplets. By locally activating proteasomes during maturation of the nascent lipid droplet, OGA-S could participate in an O-GlcNAc-dependent feedback loop regulating lipid droplet surface remodeling. Our findings therefore suggest a mechanistic link between hexosamine signaling and lipid droplet assembly and mobilization.