Modification of proteins with polyubiquitin chains is a key regulatory mechanism to control cellular behavior and alterations in the ubiquitin system are linked to many diseases. Linear (M1-linked) polyubiquitin chains play pivotal roles in several cellular signaling pathways mediating immune and inflammatory responses and apoptotic cell death. These chains are formed by the linear ubiquitin chain assembly complex (LUBAC), a multiprotein E3 ligase that consists of 3 subunits, HOIP, HOIL-1L, and SHARPIN. Herein, we describe the discovery of inhibitors targeting the active site cysteine of the catalytic subunit HOIP using fragment-based covalent ligand screening. We report the synthesis of a diverse library of electrophilic fragments and demonstrate an integrated use of protein LC-MS, biochemical ubiquitination assays, chemical synthesis, and protein crystallography to enable the first structure-based development of covalent inhibitors for an RBR E3 ligase. Furthermore, using cell-based assays and chemoproteomics, we demonstrate that these compounds effectively penetrate mammalian cells to label and inhibit HOIP and NF-κB activation, making them suitable hits for the development of selective probes to study LUBAC biology. Our results illustrate the power of fragment-based covalent ligand screening to discover lead compounds for challenging targets, which holds promise to be a general approach for the development of cell-permeable inhibitors of thioester-forming E3 ubiquitin ligases.