A necessary step in ubiquitin-dependent proteolysis is the addition of a polyubiquitin chain to the target protein. This ubiquitinated protein is degraded by a multisubunit complex known as the 26S proteasome. The polyubiquitin chain is probably not released until a late stage in the proteolysis by the proteasome. It is subsequently disassembled to yield functional ubiquitin monomers. Here we present evidence that a 93 kDa protein, isopeptidase T, has the properties expected for the enzyme which disassembles these branched polyubiquitin chains. Protein and cDNA sequencing revealed that isopeptidase T is a member of the ubiquitin specific protease family (UBP). Isopeptidase T disassembles branched polyubiquitin chains (linked by the G76-K48 isopeptide bond) by a sequential exo mechanism, starting at the proximal end of the chain (the proximal ubiquitin contains a free carboxyl-terminus). Isopeptidase T prefers to disassemble chains in which there is an intact and unblocked RGG sequence at the C-terminus of the proximal subunit. Rates of disassembly are reduced when G76 of the proximal ubiquitin is modified, for example, by ligation to substrate protein, by esterification, by replacement of the proximal glycine with alanine (G76A), or by truncation. Linear proubiquitin is only a poor substrate. Observed rates and specificity are consistent with isopeptidase T playing a major role in disassembly of polyubiquitin chains. The high discrimination against chains that are blocked or modified at the proximal end indicates that the enzyme acts after release of the chains from conjugated proteins or degradation intermediates. Thus, the proteolytic degradation signal is not disassembled by isopeptidase T before the ubiquitinated protein is degraded. These (and earlier) results suggest that UBP isozymes may exhibit significant substrate specificity, consistent with a role in the regulated catabolism of the polymeric ubiquitin, including the polyubiquitin protein degradation signal.