Ubiquitin-like protein/sentrin-specific proteases (Ulp/SENPs) mediate both processing and deconjugation of small ubiquitin-like modifier proteins (SUMOs). Here, we show that Ulp/SENP family members SENP3 and SENP5 localize within the granular component of the nucleolus, a subnucleolar compartment that contains B23/nucleophosmin. B23/nucleophosmin is an abundant shuttling phosphoprotein, which plays important roles in ribosome biogenesis and which has been strongly implicated in hematopoietic malignancies. Moreover, we found that B23/nucleophosmin binds SENP3 and SENP5 in Xenopus laevis egg extracts and that it is essential for stable accumulation of SENP3 and SENP5 in mammalian tissue culture cells. After either codepletion of SENP3 and SENP5 or depletion of B23/nucleophosmin, we observed accumulation of SUMO proteins within nucleoli. Finally, depletion of these Ulp/SENPs causes defects in ribosome biogenesis reminiscent of phenotypes observed in the absence of B23/nucleophosmin. Together, these results suggest that regulation of SUMO deconjugation may be a major facet of B23/nucleophosmin function in vivo.