Modification of specific intracellular proteins by ubiquitin targets them for degradation. We describe a yeast enzyme, Doa4, that is integral to the degradation of ubiquitinated proteins and is required in diverse physiological processes. Doa4 appears to function late in the proteolytic pathway by cleaving ubiquitin from substrate remnants still bound to protease. The human tre-2 oncogene encodes a deubiquitinating enzyme similar to Doa4, indicating a role for the ubiquitin system in mammalian growth control.