Ubiquitin thioesterase that acts at the late endosome/prevacuolar compartment to recover ubiquitin from ubiquitinated membrane proteins en route to the vacuole. Removes also ubiquitin from soluble proteins targeted to proteasomes. Is essential to maintain a normal level of free ubiquitin. Required for promoting coordination of DNA replication and avoids DNA overreplication (By similarity). Thiol-dependent hydrolysis of ester, thioester, amide, peptide and isopeptide bonds formed by the C-terminal Gly of ubiquitin (a 76-residue protein attached to proteins as an intracellular targeting signal). RFU1 is an inhibitor of deubiquitination activity. Belongs to the peptidase C19 family.