Nuclear factor κB (NF-κB) is a key transcription factor in inflammatory immune responses and cell survival. Multiple types of ubiquitination play critical roles in the activation of NF-κB signaling, yet the molecular mechanisms responsible for their reversible deubiquitination are still poorly understood. In this study, we identified a member of the deubiquitinases family, ubiquitin-specific protease 18 (USP18), as a novel negative regulator in Toll-like receptor (TLR)-mediated NF-κB activation in human macrophages. USP18 is an interferon inducible gene, which is also upregulated by various TLR ligands in human monocytes and macrophages. Knockdown of USP18 enhanced the phosphorylation of IKK, the degradation of IκB, and augmented the expression of pro-inflammatory cytokines. Furthermore, USP18 interacted with TAK1-TAB1 complex and IKKα/β-NEMO complex, respectively. USP18 cleaved the K63-linked polyubiquitin chains attached to TAK1 in a protease-dependent manner. Moreover, USP18 targeted the IKK complex through the regulatory subunit NEMO of IKK, and specifically inhibited K63-linked ubiquitination of NEMO. Mutation analysis revealed direct binding of USP18 to the UBAN motif of NEMO. Our study has identified a previously unrecognized role for USP18 in the negative regulation of NF-κB activation by inhibiting K63-linked ubiquitination of TAK1 and NEMO through distinct mechanisms.