TNF is a key inflammatory cytokine. Using a modified tandem affinity purification approach, we identified HOIL-1 and HOIP as functional components of the native TNF-R1 signaling complex (TNF-RSC). Together, they were shown to form a linear ubiquitin chain assembly complex (LUBAC) and to ubiquitylate NEMO. We show that LUBAC binds to ubiquitin chains of different linkage types and that its recruitment to the TNF-RSC is impaired in TRADD-, TRAF2-, and cIAP1/2- but not in RIP1- or NEMO-deficient MEFs. Furthermore, the E3 ligase activity of cIAPs, but not TRAF2, is required for HOIL-1 recruitment to the TNF-RSC. LUBAC enhances NEMO interaction with the TNF-RSC, stabilizes this protein complex, and is required for efficient TNF-induced activation of NF-kappaB and JNK, resulting in apoptosis inhibition. Finally, we demonstrate that sustained stability of the TNF-RSC requires LUBAC's enzymatic activity, thereby adding a third form of ubiquitin linkage to the triggering of TNF signaling by the TNF-RSC.