NF-kappaB essential modulator (NEMO), the regulatory subunit of the IkappaB kinase (IKK) that activates NF-kappaB, is essential for NF-kappaB activation. NEMO was recently found to contain a region that preferentially binds Lys (K)63-linked but not K48-linked polyubiquitin (polyUb) chains, and the ability of NEMO to bind to K63-linked polyUb RIP (receptor-interacting protein) is necessary for efficient tumor necrosis factor alpha (TNFalpha)-induced NF-kappaB activation. Optineurin is a homolog of NEMO, and mutations in the optineurin gene are found in a subset of patients with glaucoma, a neurodegenerative disease involving the loss of retinal ganglion cells. Although optineurin shares considerable homology with NEMO, in resting cells, it is not present in the high-molecular-weight complex containing IKKalpha and IKKbeta, and optineurin cannot substitute for NEMO in lipopolysaccharide (LPS)-induced NF-kappaB activation. On the other hand, the overexpression of optineurin blocks the protective effect of E3-14.7K on cell death caused by the overexpression of TNFalpha receptor 1 (TNFR1). Here we show that optineurin has a K63-linked polyUb-binding region similar to that of NEMO, and like NEMO, it bound K63- but not K48-linked polyUb. Optineurin competitively antagonized NEMO's binding to polyUb RIP, and its overexpression inhibited TNFalpha-induced NF-kappaB activation. This competition occurs at physiologic protein levels because microRNA silencing of optineurin resulted in markedly enhanced TNFalpha-induced NF-kappaB activity. These results reveal a physiologic role for optineurin in dampening TNFalpha signaling, and this role might provide an explanation for its association with glaucoma.