Thiol-dependent isopeptidase that recognizes and hydrolyzes the peptide bond at the C-terminal Gly of UFM1, a ubiquitin-like modifier protein bound to a number of target proteins. Does not hydrolyze SUMO1 or ISG15 ubiquitin-like proteins (PubMed:17182609, PubMed:21228277). Through TRIP4 deufmylation may regulate intracellular nuclear receptors transactivation and thereby regulate cell proliferation and differentiation (By similarity). Interacts with DDRGK1 (PubMed:21228277). Interacts with TRIP4; deufmylates TRIP4 (By similarity). Expressed at high level in brain, kidney, stomach, skeletal muscle and testis. Belongs to the peptidase C78 family. Truncated C-terminus.