Activation of the NF-κB pathway requires the formation of Met1-linked 'linear' ubiquitin chains on NEMO, which is catalysed by the Linear Ubiquitin Chain Assembly Complex (LUBAC) E3 consisting of HOIP, HOIL-1L and Sharpin. Here, we show that both LUBAC catalytic activity and LUBAC specificity for linear ubiquitin chain formation are embedded within the RING-IBR-RING (RBR) ubiquitin ligase subunit HOIP. Linear ubiquitin chain formation by HOIP proceeds via a two-step mechanism involving both RING and HECT E3-type activities. RING1-IBR catalyses the transfer of ubiquitin from the E2 onto RING2, to transiently form a HECT-like covalent thioester intermediate. Next, the ubiquitin is transferred from HOIP onto the N-terminus of a target ubiquitin. This transfer is facilitated by a unique region in the C-terminus of HOIP that we termed 'Linear ubiquitin chain Determining Domain' (LDD), which may coordinate the acceptor ubiquitin. Consistent with this mechanism, the RING2-LDD region was found to be important for NF-κB activation in cellular assays. These data show how HOIP combines a general RBR ubiquitin ligase mechanism with unique, LDD-dependent specificity for producing linear ubiquitin chains.