Linear polyubiquitination of proteins has recently been implicated in NF-κB signalling and is mediated by the linear ubiquitin chain assembly complex (LUBAC), consisting of HOIL-1, HOIP and Sharpin. However, the mechanisms that regulate linear ubiquitination are still unknown. Here, we show that A20 is rapidly recruited to NEMO and LUBAC upon TNF stimulation and that A20 inhibits LUBAC-induced NF-κB activation via its C-terminal zinc-finger 7 (ZF7) domain. Expression of a polypeptide corresponding to only ZF7 was sufficient to inhibit TNF-induced NF-κB activation. Both A20 and ZF7 can form a complex with NEMO and LUBAC, and are able to prevent the TNF-induced binding of NEMO to LUBAC. Finally, we show that ZF7 preferentially binds linear polyubiquitin chains in vitro, indicating A20-ZF7 as a novel linear ubiquitin-binding domain (LUBID). We thus propose a model in which A20 inhibits TNF- and LUBAC-induced NF-κB signalling by binding to linear polyubiquitin chains via its seventh zinc finger, which prevents the TNF-induced interaction between LUBAC and NEMO.