DUBs (deubiquitinating enzymes) are a family of proteases responsible for the specific removal of ubiquitin attached to target proteins and thus control the free cellular pools of this molecule. DUB activity is usually assayed using full-length ubiquitin, and these enzymes generally show low activity towards small substrates that constitute the P4-P1 LRGG (Lys-Arg-Gly-Gly) C-terminal motif of ubiquitin. To gain insight into the C-terminal recognition region of ubiquitin by DUBs, we synthesized positional scanning libraries of fluorigenic tetrapeptides and tested them on three examples of human DUBs [OTU-1 (ovarian tumour 1), Iso-T (isopeptidase T) and UCH-L3 (ubiquitin C-terminal hydrolase L3)] and one viral ubiquitin-specific protease, namely PLpro (papain-like protease) from SARS (severe acute respiratory syndrome) virus. In most cases the results show flexibility in the P4 position, very high specificity for arginine in the P3 position and glycine in the P2 position, in accord with the sequence of the natural substrate, ubiquitin. Surprisingly, screening of the P2 position revealed that UCH-L3, in contrast with all the other tested DUBs, demonstrates substantial tolerance of alanine and valine at P2, and a parallel analysis using the appropriate mutation of the full-length ubiquitin confirms this. We have also used an optimal tetrapeptide substrate, acetyl-Lys-Arg-Gly-Gly-7-amino-4-methylcoumarin, to investigate the activation mechanism of DUBs by ubiquitin and elevated salt concentration. Together, our results reveal the importance of the dual features of (1) substrate specificity and (2) the mechanism of ubiquitin binding in determining deubiquitination by this group of proteases.