The ubiquitin ligase TRAF6 is a key regulator of canonical IκB kinase (IKK)/NF-κB signaling in response to interleukin-1 (IL-1) stimulation. Here, we identified the deubiquitinating enzyme YOD1 (OTUD2) as a novel interactor of TRAF6 in human cells. YOD1 binds to the C-terminal TRAF homology domain of TRAF6 that also serves as the interaction surface for the adaptor p62/Sequestosome-1, which is required for IL-1 signaling to NF-κB. We show that YOD1 competes with p62 for TRAF6 association and abolishes the sequestration of TRAF6 to cytosolic p62 aggregates by a non-catalytic mechanism. YOD1 associates with TRAF6 in unstimulated cells but is released upon IL-1β stimulation, thereby facilitating TRAF6 auto-ubiquitination as well as NEMO/IKKγ substrate ubiquitination. Further, IL-1 triggered IKK/NF-κB signaling and induction of target genes is decreased by YOD1 overexpression and augmented after YOD1 depletion. Hence, our data define that YOD1 antagonizes TRAF6/p62-dependent IL-1 signaling to NF-κB.