Multiple factors influence translation termination efficiency, including nonsense codon identity and immediate context. To determine whether the relative position of a nonsense codon within an open reading frame (ORF) influences termination efficiency, we quantitate the production of prematurely terminated and/or readthrough polypeptides from 26 nonsense alleles of 3 genes expressed in yeast. The accumulation of premature termination products and the extent of readthrough for the respective premature termination codons (PTCs) manifest a marked dependence on PTC proximity to the mRNA 3′ end. Premature termination products increase in relative abundance, whereas readthrough efficiencies decrease progressively across different ORFs, and readthrough efficiencies for a PTC increase in response to 3′ UTR lengthening. These effects are eliminated and overall translation termination efficiency decreases considerably in cells harboring pab1 mutations. Our results support a critical role for poly(A)-binding protein in the regulation of translation termination and also suggest that inefficient termination is a trigger for nonsense-mediated mRNA decay (NMD).