Ubiquitin mediated signaling contributes critically to host cell defenses during pathogen infection. Many pathogens manipulate the ubiquitin system to evade these defenses. Here we characterize a likely effector protein bearing a deubiquitylase (DUB) domain from the obligate intracellular bacterium Orientia tsutsugamushi, the causative agent of scrub typhus. The Ulp1-like DUB prefers ubiquitin substrates over ubiquitin-like proteins and efficiently cleaves polyubiquitin chains of three or more ubiquitins. The co-crystal structure of the DUB (OtDUB) domain with ubiquitin revealed three bound ubiquitins: one engages the S1 site, the second binds an S2 site contributing to chain specificity and the third binds a unique ubiquitin-binding domain (UBD). The UBD modulates OtDUB activity, undergoes a pronounced structural transition upon binding ubiquitin, and binds monoubiquitin with an unprecedented ~5 nM dissociation constant. The characterization and high-resolution structure determination of this enzyme should aid in its development as a drug target to counter Orientia infections.