Peptidase_C98 is a small family of SUMO - small ubiquitin-related modifier - isopeptidases found in eukaryotes. Reversible attachment of SUMO is an essential protein modification in all eukaryotic cells, The family neither binds nor cleaves ubiquitin, but is a potent SUMO isopeptidase, and the invariant residues required for SUMO binding and cleavage, in human USPL1, are Cys-236, His-456 and Asp-472, all of which are fully conserved in the family. Member proteins are low-abundance proteins that colocalise with coilin in Cajal bodies. Peptidase_C98 depletion does not affect global sumoylation, but causes striking coilin mis-localisation and impairs cell proliferation, functions that are not dependent on the catalytic activity. Thus, Peptidase_C98 represents a third type of SUMO protease, with essential functions in Cajal body biology.