The human cytomegalovirus (HCMV) UL50 gene encodes a transmembrane protein, pUL50, which acts as a core component of the nuclear egress complex (NEC) for nucleocapsids. Recently, pUL50 has been shown to have NEC-independent activities: downregulation of IRE1 to repress the unfolded protein response and degradation of UBE1L to inhibit the protein ISG15 modification pathway. Here, we demonstrate that a 26-kDa N-terminal truncated isoform of pUL50 (UL50-p26) is expressed from an internal methionine at amino acid position 199 and regulates the activity of pUL50 to induce the loss of valosin-containing protein (VCP/p97). A UL50(M199V) mutant virus expressing pUL50(M199V) but not UL50-p26 showed delayed growth at a low multiplicity of infection. There was also delayed accumulation of the viral immediate early 2 (IE2) protein in the mutant virus, and this correlated with the reduced expression of VCP/p97, which promotes IE2 expression. Infection with mutant virus did not significantly alter ISGylation levels. In transient expression assays, pUL50 induced VCP/p97 loss posttranscriptionally, and this was dependent on the presence of its transmembrane domain. In contrast, UL50-p26 did not destabilize VCP/p97 but, rather, inhibited pUL50-mediated VCP/p97 loss and the associated major IE gene suppression. Both pUL50 and UL50-p26 interacted with VCP/p97, although UL50-p26 did so more weakly than pUL50. UL50-p26 interacted with pUL50, and this interaction was much stronger than the pUL50 self-interaction. Furthermore, UL50-p26 was able to interfere with the pUL50-VCP/p97 interaction. Our study newly identifies UL50-p26 expression during HCMV infection and suggests a regulatory role for UL50-p26 in blocking pUL50-mediated VCP/p97 loss by associating with pUL50. Targeting the endoplasmic reticulum (ER) by viral proteins may affect ER-associated protein homeostasis. During human cytomegalovirus (HCMV) infection, pUL50 targets the ER through its transmembrane domain and moves to the inner nuclear membrane (INM) to form the nuclear egress complex (NEC), which facilitates capsid transport from the nucleus to the cytoplasm. Here, we demonstrate that pUL50 induces the loss of valosin-containing protein (VCP/p97), which promotes the expression of viral major immediate early gene products, in a manner dependent on its membrane targeting but that a small isoform of pUL50 is expressed to negatively regulate this pUL50 activity. This study reports a new NEC-independent function of pUL50 and highlights the fine regulation of pUL50 activity by a smaller isoform for efficient viral growth.