Interferons (IFNs) regulate diverse cellular functions through activation of the Janus kinase–signal transducer and activator of transcription (JAK–STAT) pathway. Lack of Ubp43, an IFN‐inducible ISG15 deconjugating enzyme, leads to IFN hypersensitivity in ubp43−/− mice, suggesting an important function of Ubp43 in downregulation of IFN responses. Here, we show that Ubp43 negatively regulates IFN signaling independent of its isopeptidase activity towards ISG15. Ubp43 functions specifically for type I IFN signaling by downregulating the JAK–STAT pathway at the level of the IFN receptor. Using molecular, biochemical, and genetic approaches, we demonstrate that Ubp43 specifically binds to the IFNAR2 receptor subunit and inhibits the activity of receptor‐associated JAK1 by blocking the interaction between JAK and the IFN receptor. These data implicate Ubp43 as a novel in vivo inhibitor of signal transduction pathways that are specifically triggered by type I IFN.