SHARPIN is a ubiquitin-binding and ubiquitin-like-domain-containing protein which, when mutated in mice, results in immune system disorders and multi-organ inflammation. Here we report that SHARPIN functions as a novel component of the linear ubiquitin chain assembly complex (LUBAC) and that the absence of SHARPIN causes dysregulation of NF-κB and apoptotic signalling pathways, explaining the severe phenotypes displayed by chronic proliferative dermatitis (cpdm) in SHARPIN-deficient mice. Upon binding to the LUBAC subunit HOIP (also known as RNF31), SHARPIN stimulates the formation of linear ubiquitin chains in vitro and in vivo. Coexpression of SHARPIN and HOIP promotes linear ubiquitination of NEMO (also known as IKBKG), an adaptor of the IκB kinases (IKKs) and subsequent activation of NF-κB signalling, whereas SHARPIN deficiency in mice causes an impaired activation of the IKK complex and NF-κB in B cells, macrophages and mouse embryonic fibroblasts (MEFs). This effect is further enhanced upon concurrent downregulation of HOIL-1L (also known as RBCK1), another HOIP-binding component of LUBAC. In addition, SHARPIN deficiency leads to rapid cell death upon tumour-necrosis factor α (TNF-α) stimulation via FADD- and caspase-8-dependent pathways. SHARPIN thus activates NF-κB and inhibits apoptosis via distinct pathways in vivo.