A cDNA encoding a new ubiquitin-specific protease, UBP41, in chick skeletal muscle was cloned using an Escherichia coli-based in vivo screening method. Nucleotide sequence analysis of the cDNA containing an open reading frame of 1,071 base pairs revealed that the protease consists of 357 residues with a calculated molecular mass of 40,847 Da, and is related to members of the UBP family containing highly conserved Cys and His domains. Chick UBP41 was expressed in E. coli and purified from the cells to apparent homogeneity, using 125I-labeled ubiquitin-alphaNH-MHISPPEPESEEEEEHYC as a substrate. The purified enzyme behaved as an approximately 43-kDa protein under both denaturing and nondenaturing conditions, suggesting that it consists of a single polypeptide chain. Like other deubiquitinating enzymes, it was sensitive to inhibition by ubiquitin-aldehyde and sulfhydryl blocking agents, such as N-ethylmaleimide. The UBP41 protease cleaved at the C terminus of the ubiquitin moiety in natural and engineered fusions irrespective of their sizes; thus, it is active against ubiquitin-beta-galactosidase as well as ubiquitin C-terminal extension protein of 80 amino acids. UBP41 also released free ubiquitin from poly-His-tagged di-ubiquitin. Moreover, it converted poly-ubiquitinated lysozyme conjugates to mono-ubiquitinated forms of about 24 kDa, although the latter molecules were not further degraded to free ubiquitin and lysozyme. These results suggest that UBP41 may play an important role in the recycling of ubiquitin by hydrolysis of branched poly-ubiquitin chains generated by the action of 26 S proteasome on poly-ubiquitinated protein substrates, as well as in the production of free ubiquitin from linear poly-ubiquitin chains and of certain ribosomal proteins from ubiquitin fusion proteins.