The NF-kappaB transcription factor is normally transiently activated by proinflammatory cytokines and bacterial lipopolysaccharide (LPS); however, persistent NF-kappaB activation is commonly observed in inflammatory disease and malignancy. The ubiquitin editing enzyme A20 serves an essential role in the termination of TNF-alpha- and LPS-mediated NF-kappaB signaling by inactivating key signaling molecules. However, little is known about how A20 is regulated and if other molecules play a role in the termination of NF-kappaB signaling. Here we demonstrate that Tax1-binding protein 1 (TAX1BP1) is essential for the termination of NF-kappaB and JNK activation in response to TNF-alpha, IL-1 and LPS stimulation. In TAX1BP1-deficient mouse fibroblasts, TNF-alpha-, IL-1- and LPS-mediated IKK and JNK activation is elevated and persistent owing to enhanced ubiquitination of RIP1 and TRAF6. Furthermore, in the absence of TAX1BP1, A20 is impaired in RIP1 binding, deubiquitination of TRAF6 and inhibition of NF-kappaB activation. Thus, TAX1BP1 is pivotal for the termination of NF-kappaB and JNK signaling by functioning as an essential regulator of A20.