Mucosa-associated lymphoid tissue (MALT) lymphoma is a common type of lymphoma in extranodal sites. The most frequent chromosome translocation associated with MALT lymphoma is t(11;18)(q21;q21), which generates a chimeric protein of c-IAP2 and MALT1/paracaspase. The c-IAP2/MALT1 fusion protein activates the NF-κB pathway, which is considered critical to malignant B cell transformation and lymphoma progression. The mechanism by which this fusion protein activates NF-κB, however, remains unclear. Here we show that self-oligomerization of the c-IAP2/MALT1 protein causes deregulated ubiquitin ligase activity of MALT1/paracaspase. The chimeric protein targets NEMO for polyubiquitination and thereby activates NF-κB. Consistent with this finding, NEMO ubiquitination is increased in t(11;18)(q21;q21)-positive MALT lymphoma samples. Thus, t(11;18)(q21;q21) deregulates MALT1/paracaspase ubiquitin ligase activity, causing constitutive NF-κB activation and promoting tumorigenesis.