Deubiquitinating enzymes (DUBs) proteolytically cleave ubiquitin from ubiquitinated proteins, and inhibition of DUBs that rescue oncogenic proteins from proteasomal degradation is of emerging therapeutic interest. Recently, USP2 and UCH37 have been shown to deubiquitinate tumor-growth-promoting proteins, and other DUBs have been shown to be overexpressed in cancer cells. Therefore inhibition of DUBs is of interest as a potential therapeutic strategy for treating cancer. DUBs require the presence of properly folded ubiquitin protein in the substrate for efficient proteolysis, which precludes the use of synthetic peptide substrates in DUB activity assays. Because of the requirement for full-length ubiquitin, substrates suitable for use in fluorescent assays to identify or study DUB inhibitors have been difficult to prepare. We describe the development of a time-resolved fluorescence resonance energy transfer (FRET)-based DUB substrate that incorporates full-length ubiquitin that is site-specifically labeled using genetically encoded yellow fluorescent protein (YFP) and a chemically attached terbium donor. The intact substrate shows a high degree of FRET between terbium and YFP, whereas DUB-dependent cleavage leads to a decrease in FRET.