The ubiquitin-like protein SUMO-1 (small ubiquitin-related modifier 1) is covalently attached to substrate proteins by ligases and cleaved by isopeptidases. Yeast has two SUMO-1-deconjugating enzymes, Ulp1 and Ulp2, which are located at nuclear pores and in the nucleoplasm, respectively. Here we show that the catalytic C-domain of Ulp1 must be excluded from the nucleoplasm for cell viability. This is achieved by the noncatalytic N-domain, which tethers Ulp1 to the nuclear pores. The bulk of cellular Ulp1 is not associated with nucleoporins but instead associates with three karyopherins (Pse1, Kap95 and Kap60), in a complex that is not dissociated by RanGTP in vitro. The Ulp1 N-domain has two distinct binding sites for Pse1 and Kap95/Kap60, both of which are required for anchoring to the nuclear pore complex. We propose that Ulp1 is tethered to the nuclear pores by a Ran-insensitive interaction with karyopherins associated with nucleoporins. This location could allow Ulp1 to remove SUMO-1 from sumoylated cargo proteins during their passage through the nuclear pore channel.