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. Involved in the ammonium-induced down-regulation of the GAP1 permease and the UME3 destruction in response to oxidative stress. Has a role in the RAD9 checkpoint response to TOP1 poisons. 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. Interacts with BRO1, RFU1 and VPS32. Associates with the 26S proteasome (By similarity). Recruited to the late endosome by BRO1. Residues 1-208 are essential for the localization to the late endosome and constitute a late endosome localization (LEL) domain. Belongs to the peptidase C19 family.