Deubiquitinating enzymes (DUBs) function in a variety of cellular processes by removing ubiquitin moieties from substrates, but their role in DNA repair has not been elucidated. Yeast Rad4-Rad23 heterodimer is responsible for recognizing DNA damage in nucleotide excision repair (NER). Rad4 binds to UV damage directly while Rad23 stabilizes Rad4 from proteasomal degradation. Here, we show that disruption of yeast deubiquitinase UBP3 leads to enhanced UV resistance, increased repair of UV damage and Rad4 levels in rad23Δ cells, and elevated Rad4 stability. A catalytically inactive Ubp3 (Ubp3-C469A), however, is unable to affect NER or Rad4. Consistent with its role in down-regulating Rad4, Ubp3 physically interacts with Rad4 and the proteasome, both in vivo and in vitro, suggesting that Ubp3 associates with the proteasome to facilitate Rad4 degradation and thus suppresses NER.