Cylindromas are benign adnexal skin tumors caused by germline mutations in the CYLD gene. In most cases the second wild-type allele is lost in tumor tissue, suggesting that CYLD functions as tumor suppressor. CYLD is a protein of 956 amino acids harboring a functional deubiquitinating domain at the COOH-terminal end. To shed more light on the function of CYLD, we have performed a yeast two hybrid screen using an HaCaT cDNA library that identified the RING finger protein TRIP (TRAF-interacting protein) as interactor with full-length CYLD. Mapping of the interacting domains revealed that the central domain of CYLD binds to the COOH-terminal end of TRIP. Far Western analysis and coimmunoprecipitations in mammalian cells confirmed that full-length CYLD binds to the COOH-terminal domain of TRIP. Because TRIP is an inhibitor of nuclear factor (NF)-κB activation by tumor necrosis factor (TNF), the effect of CYLD on NF-κB activation was investigated in HeLa cells. The results established that CYLD down-regulates NF-κB activation by TNF-α. The inhibition by CYLD depends on the presence of the central domain interacting with TRIP and its deubiquitinating activity. These findings indicate that cylindromas arise through constitutive NF-κB activation leading to hyperproliferation and tumor growth.