UnpEL (also known as Usp4 or Unph) is an oncogenic protein, because its expression with a strong promoter results in the tumorigenic transformation of NIH3T3 cells injected into nude mice. Although the structure of UnpEL is that of a deubiquitinating enzyme, neither its precise function in mammalian cells nor the mechanism of UnpEL-mediated tumorigenesis is known. Here, we show that UnpEL functions as a deubiquitinating enzyme in human HEK293T cells and its isopeptidase activity deconjugates ubiquitin specifically from a UnpEL-interacting protein Ro52. We further show that UnpEL translocates to the cytoplasmic rod-like structures and colocalizes with Ro52 when Ro52 is overexpressed in HEK293 cells. These results suggest that UnpEL colocalizes with the unubiquitinated form of Ro52 to the cytoplasmic rod-like structures, where it keeps Ro52 unubiquitinated. The continuous deubiquitination of Ro52 might be involved in tumorigenesis.