The Toll-like receptor (TLR)/IL-1 receptor (IL-1R) signaling pathway is essential for innate immune responses and immune homeostasis. Lys-63-polyubiquitinated TRAF6 mediates its downstream signaling activation. In a gain-of-expression screen of 66 different deubiquitinating enzymes, we identified USP4 as a potent negative regulator of TLR/IL-1R signaling and TRAF6-interacting protein. USP4 deubiquitinates TRAF6 and thereby prevents the activation of NF-κB and AP-1 transcription factors and subsequent proinflammatory responses. LPS-treated usp4-depleted zebrafish larvae expressed higher levels of proinflammatory cytokines and were more susceptible to endotoxic challenge. Taken together, our results demonstrate that USP4 plays an essential role in negative regulation of the TLR/IL-1R signaling-mediated innate immune response.