Cholesterol metabolism is subject to complex transcriptional and nontranscriptional regulation. Herein, the role of ubiquitylation is emerging as an important post-translational modification that regulates cholesterol synthesis and uptake. Similar to other post-translational modifications, ubiquitylation is reversible in a process dependent on activity of deubiquitylating enzymes (DUBs). Yet whether these play a role in cholesterol metabolism is largely unknown. As a first step to test this possibility, we used pharmacological inhibition of cellular DUB activity. Short term (2 h) inhibition of DUBs resulted in accumulation of high molecular weight ubiquitylated proteins. This was accompanied by a dramatic decrease in abundance of the LDLR and attenuated LDL uptake into hepatic cells. Importantly, this occurred in the absence of changes in the mRNA levels of the LDLR or other SREBP2-regulated genes, in line with this phenotype being a post-transcriptional event. Mechanistically, we identify transcriptional induction of the E3 ubiquitin ligase IDOL in human and rodent cells as the underlying cause for ubiquitylation-dependent lysosomal degradation of the LDLR following DUB inhibition. In contrast to the established transcriptional regulation of IDOL by the sterol-responsive liver X receptor (LXR) transcription factors, induction of IDOL by DUB inhibition is LXR-independent and occurs in Lxrαβ−/− MEFs. Consistent with the role of DUBs in transcriptional regulation, we identified a 70-bp region in the proximal promoter of IDOL, distinct from that containing the LXR-responsive element, which mediates the response to DUB inhibition. In conclusion, we identify a sterol-independent mechanism to regulate IDOL expression and IDOL-mediated lipoprotein receptor degradation.