A20 is a cytoplasmic protein required for the termination of tumor necrosis factor (TNF)-induced signals. We show here that mice doubly deficient in either A20 and TNF or A20 and TNF receptor 1 developed spontaneous inflammation, indicating that A20 is also critical for the regulation of TNF-independent signals in vivo. A20 was required for the termination of Toll-like receptor-induced activity of the transcription factor NF-kappaB and proinflammatory gene expression in macrophages, and this function protected mice from endotoxic shock. A20 accomplished this biochemically by directly removing ubiquitin moieties from the signaling molecule TRAF6. The critical function of this deubiquitinating enzyme in the restriction of TLR signals emphasizes the importance of the regulation of ubiquitin conjugation in innate immune cells.