OTULIN is a linear deubiquitinase that negatively regulates the nuclear factor κB (NF-κB) signaling pathway. Patients with OTULIN deficiency, termed as otulipenia or OTULIN-related autoinflammatory syndrome, present with early onset severe systemic inflammation due to increased NF-κB activation. We aimed to investigate additional disease mechanisms of OTULIN deficiency. Our study found a remarkable activation of type I interferon (IFN-I) signaling in whole blood, peripheral blood mononuclear cells, monocytes, and serum from patients with OTULIN deficiency. We observed similar immunologic findings in OTULIN-deficient cell lines generated by CRISPR. Mechanistically, we identified proteasome subunits as substrates of OTULIN deubiquitinase activity and demonstrated proteasome dysregulation in OTULIN-deficient cells as the cause of IFN-I activation. These results reveal an important role of linear ubiquitination in the regulation of proteasome function and suggest a link in the pathogenesis of proteasome-associated autoinflammatory syndromes and OTULIN deficiency.