Specifically deubiquitinates 'Lys-120' of histone H2A (H2AK119Ub), a specific tag for epigenetic transcriptional repression, thereby acting as a coactivator. Deubiquitination of histone H2A is a prerequisite for subsequent phosphorylation at 'Ser-11' of histone H3 (H3S10ph), and is required for chromosome segregation when cells enter into mitosis. In resting B- and T-lymphocytes, phosphorylation by AURKB leads to enhance its activity, thereby maintaining transcription in resting lymphocytes. Regulates Hox gene expression via histone H2A deubiquitination. Prefers nucleosomal substrates. Does not deubiquitinate histone H2B. Also deubiquitinates non-histone proteins, such as ribosomal protein RPS27A: deubiquitination of monoubiquitinated RPS27A promotes maturation of the 40S ribosomal subunit.
Subcellular locations: Nucleus