Monoubiquitination of histone H2B is a dynamic post-translational histone modification associated with transcriptional elongation and the DNA damage response. To date, dysregulation of histone monoubiquitination has not been linked to pathogenic mutations in genes encoding proteins, or co-factors, catalyzing this modification. The tumor suppressor cell division cycle 73 (CDC73) is mutated and/or down-regulated in parathyroid carcinoma, renal, breast, gastric and colorectal tumors, as well as in the germline of patients with the familial disorder-hyperparathyroidism jaw tumor syndrome. Using CDC73 as bait in a yeast two-hybrid assay, we identified the ring finger proteins RNF20 and RNF40 as binding partners of this tumor suppressor. These polypeptides constitute a heterodimeric complex that functions as the E3 ubiquitin ligase for monoubiquitination of histone H2B at lysine 120 (H2B-K120). We show that RNF20 and RNF40 bind to discrete, but closely located, residues on CDC73. Monoubiquitinated H2B-K120 was significantly reduced after loss of nuclear CDC73, both in vitro upon down-regulation of CDC73, and in CDC73 mutant parathyroid tumors. A second histone modification, trimethylation of histone 3 at lysine 4 (H3-K4me3), remained unchanged in the presence of mutant or down-regulated CDC73, suggesting that H3-K4me3 is not always tightly linked to H2B-K120 monoubiquitination for transcription as previously described. This is the first report of pathogenic mutations affecting histone monoubiquitination. We conclude that CDC73 is required for the maintenance of H2B-K120 monoubiquitination and propose that reduction in levels of monoubiquitinated H2B-K120 is a major mechanism whereby mutations in CDC73 exert their tumorigenic effect.