The covalent attachment of ubiquitin molecules to target proteins is a posttranslational modification that is involved not only in signaling processes leading to protein degradation but also in those resulting in activation, proliferation, and cell death. Ubiquitination is a versatile regulation mechanism: In addition to single ubiquitin molecules, chains consisting of several ubiquitin moieties can also be attached to target proteins. The functional outcome of polyubiquitination depends on the lysine residue within ubiquitin that is used for chain elongation. The reason for this is that the particular linkage between two ubiquitin moieties through a specific lysine residue of one ubiquitin and the C terminus of the other ubiquitin creates a unique binding surface that is specifically recognized by specialized ubiquitin-binding domains. New evidence indicates that besides the seven internal lysine residues of ubiquitin, the N terminus of ubiquitin can also be used as an attachment point, thereby generating linear or M1-linked polyubiquitin chains. An E3 complex consisting of HOIL-1, HOIP, and Sharpin specifically generates such M1-linked ubiquitin chains in the context of various cellular signaling pathways that regulate cell activation and death, and it was named linear ubiquitin chain assembly complex (LUBAC). In this Review, we focus on the biochemistry and physiological role of linear ubiquitin chains generated by LUBAC. We summarize the function of linear ubiquitin chains in signaling pathways downstream of diverse cellular signaling events and provide an outlook on promising future directions of research.