Eukaryotic genomes encode large families of deubiquitinating enzymes (DUBs). Genetic data suggest that Fat facets (Faf), aDrosophila DUB essential for patterning the compound eye, might have a novel regulatory function; Faf might reverse the ubiquitination of a specific substrate, thereby preventing proteasomal degradation of that protein. Additional genetic data implicate Liquid facets (Lqf), a homolog of the vertebrate endocytic protein epsin, as a candidate for the key substrate of Faf. Here, biochemical experiments critical to testing this model were performed. The results show definitively that Lqf is the key substrate of Faf in the eye; Lqf concentration is Faf-dependent, Lqf is ubiquitinated in vivo and deubiquitinated by Faf, and Lqf and Faf interact physically.