Negative regulation of immunoreceptor signaling is required for preventing hyperimmune activation and maintaining immune homeostasis. The roles of p38IP in immunoreceptor signaling remain unclear. Here, we show that p38IP suppresses T-cell receptor (TCR)/LPS-activated NF-κB and p38 by targeting TAK1 kinase and that p38IP protein levels are downregulated in human PBMCs from rheumatoid arthritis (RA) patients, inversely correlating with the enhanced activity of NF-κB and p38. Mechanistically, p38IP interacts with TAK1 to disassemble the TAK1-TAB (TAK1-binding protein) complex. p38IP overexpression decreases TCR-induced binding of K63-linked polyubiquitin (polyUb) chains to TAK1 but increases that to TAB2, and p38IP knockdown shows the opposite effects, indicating unanchored K63-linked polyUb chain transfer from TAB2 to TAK1. p38IP dynamically interacts with TAK1 upon stimulation, because of the polyUb chain transfer and the higher binding affinity of TAK1 and p38IP for polyUb-bound TAB2 and TAK1, respectively. Moreover, p38IP scaffolds the deubiquitinase USP4 to deubiquitinate TAK1 once TAK1 is activated. These findings reveal a novel role and the mechanisms of p38IP in controlling TCR/LPS signaling and suggest that p38IP might participate in RA pathogenesis.