A critical step in preserving protein homeostasis by the ubiquitin-proteasome system (UPS) is the recognition, binding, unfolding, and translocation of protein substrates by AAA-ATPase proteasome subunits for degradation by 26S proteasomes. Here, we identified fourteen different de novo missense variants in the PSMC3 gene encoding the AAA-ATPase proteasome subunit Rpt5 in twenty-two unrelated heterozygous subjects with an autosomal dominant form of neurodevelopmental delay and intellectual disability. Indeed, depletion of PSMC3 impaired reversal learning capabilities in a Drosophila model. The PSMC3 variants cause proteasome dysfunction in patient-derived cells by disruption of substrate translocation, proteotoxic stress and proteostatic imbalances, as well as alterations in proteins controlling developmental and innate immune programs. Molecular analysis confirmed the induction of cellular stress responses and dysregulated mitophagy along with an elevated type I interferon (IFN) signature. Our data define PSMC3 variants as the genetic cause of proteotoxic stress alerting the innate immune system to mount a type I IFN response and link neurodevelopmental syndromes to interferonopathies.