Hydrolase that removes conjugated ubiquitin from target proteins and regulates various pathways such as the TGF-beta receptor signaling and NF-kappa-B pathways. Acts as a key regulator of TGF-beta receptor signaling pathway, but the precise mechanism is still unclear: according to a report, acts by promoting deubiquitination of monoubiquitinated R-SMADs, thereby alleviating inhibition of R-SMADs and promoting activation of TGF-beta target genes. According to another reports, regulates the TGF-beta receptor signaling pathway by mediating deubiquitination and stabilization of tgfbr1, leading to an enhanced TGF-beta signal. May also regulate gene expression and/or DNA repair through the deubiquitination of histone H2B. Involved in endosome organization by mediating deubiquitination of rnf26 target(s), releasing vesicles that are restrained in the perinuclear region. 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). Belongs to the peptidase C19 family.