Innate immune signaling relies on the deposition of non-degradative polyubiquitin at receptor-signaling complexes, but how these ubiquitin modifications are regulated by deubiquitinases remains incompletely understood. Met1-linked ubiquitin (Met1-Ub) is assembled by the linear ubiquitin assembly complex (LUBAC), and this is counteracted by the Met1-Ub-specific deubiquitinase OTULIN, which binds to the catalytic LUBAC subunit HOIP. In this study, we report that HOIP also interacts with the deubiquitinase CYLD but that CYLD does not regulate ubiquitination of LUBAC components. Instead, CYLD limits extension of Lys63-Ub and Met1-Ub conjugated to RIPK2 to restrict signaling and cytokine production. Accordingly, Met1-Ub and Lys63-Ub were individually required for productive NOD2 signaling. Our study thus suggests that LUBAC, through its associated deubiquitinases, coordinates the deposition of not only Met1-Ub but also Lys63-Ub to ensure an appropriate response to innate immune receptor activation.