NF-κB transcription factors have key roles in inflammation, immune response, oncogenesis and protection against apoptosis^,. In most cells, these factors are kept inactive in the cytoplasm through association with IκB inhibitors. After stimulation by various reagents, IκB is phosphorylated by the IκB kinase (IKK) complex and degraded by the proteasome, allowing NF-κB to translocate to the nucleus and activate its target genes. Here we report that CYLD, a tumour suppressor that is mutated in familial cylindromatosis, interacts with NEMO, the regulatory subunit of IKK^,. CYLD also interacts directly with tumour-necrosis factor receptor (TNFR)-associated factor 2 (TRAF2), an adaptor molecule involved in signalling by members of the family of TNF/nerve growth factor receptors. CYLD has deubiquitinating activity that is directed towards non-K48-linked polyubiquitin chains, and negatively modulates TRAF-mediated activation of IKK, strengthening the notion that ubiquitination is involved in IKK activation by TRAFs and suggesting that CYLD functions in this process. Truncations of CYLD found in cylindromatosis result in reduced enzymatic activity, indicating a link between impaired deubiquitination of CYLD substrates and human pathophysiology.