The leader proteinase (L(pro)) of foot-and-mouth disease virus (FMDV) is a papain-like proteinase that plays an important role in FMDV pathogenesis. Previously, it has been shown that L(pro) is involved in the inhibition of the type I interferon (IFN) response by FMDV. However, the underlying mechanisms remain unclear. Here we demonstrate that FMDV Lb(pro), a shorter form of L(pro), has deubiquitinating activity. Sequence alignment and structural bioinformatics analyses revealed that the catalytic residues (Cys51 and His148) are highly conserved in FMDV Lb(pro) of all seven serotypes and that the topology of FMDV Lb(pro) is remarkably similar to that of ubiquitin-specific protease 14 (USP14), a cellular deubiquitylation enzyme (DUB), and to that of severe acute respiratory syndrome coronavirus (SARS-CoV) papain-like protease (PLpro), a coronaviral DUB. Both purified Lb(pro) protein and in vivo ectopically expressed Lb(pro) removed ubiquitin (Ub) moieties from cellular substrates, acting on both lysine-48- and lysine-63-linked polyubiquitin chains. Furthermore, Lb(pro) significantly inhibited ubiquitination of retinoic acid-inducible gene I (RIG-I), TANK-binding kinase 1 (TBK1), TNF receptor-associated factor 6 (TRAF6), and TRAF3, key signaling molecules in activation of type I IFN response. Mutations in Lb(pro) that ablate the catalytic activity (C51A or D163N/D164N) or disrupt the SAP (for SAF-A/B, Acinus, and PIAS) domain (I83A/L86A) abrogated the DUB activity of Lb(pro) as well as its ability to block signaling to the IFN-β promoter. Collectively, these results demonstrate that FMDV Lb(pro) possesses DUB activity in addition to serving as a viral proteinase and describe a novel mechanism evolved by FMDV to counteract host innate antiviral responses.