NF-κB transcription factors mediate the effects of pro-inflammatory cytokines such as tumour necrosis factor-α and interleukin-1β. Failure to downregulate NF-κB transcriptional activity results in chronic inflammation and cell death, as observed in A20-deficient mice. A20 is a potent inhibitor of NF-κB signalling, but its mechanism of action is unknown. Here we show that A20 downregulates NF-κB signalling through the cooperative activity of its two ubiquitin-editing domains. The amino-terminal domain of A20, which is a de-ubiquitinating (DUB) enzyme of the OTU (ovarian tumour) family, removes lysine-63 (K63)-linked ubiquitin chains from receptor interacting protein (RIP), an essential mediator of the proximal TNF receptor 1 (TNFR1) signalling complex^,. The carboxy-terminal domain of A20, composed of seven C₂/C₂ zinc fingers, then functions as a ubiquitin ligase by polyubiquitinating RIP with K48-linked ubiquitin chains, thereby targeting RIP for proteasomal degradation. Here we define a novel ubiquitin ligase domain and identify two sequential mechanisms by which A20 downregulates NF-κB signalling. We also provide an example of a protein containing separate ubiquitin ligase and DUB domains, both of which participate in mediating a distinct regulatory effect.