Signal transduction from the T cell receptor (TCR) is crucial for T cell-mediated immune responses and, when deregulated, also contributes to the development of autoimmunity. How TCR signaling is regulated is incompletely understood. In this study, we demonstrate a ubiquitin-dependent mechanism in which the deubiquitinase Otud7b has a crucial role in facilitating TCR signaling. Upon TCR ligation, Otud7b is rapidly recruited to the tyrosine kinase Zap70, a central mediator of TCR-proximal signaling. Otud7b deficiency attenuates the activation of Zap70 and its downstream pathways and impairs T cell activation and differentiation, rendering mice refractory to T cell-mediated autoimmune and inflammatory responses. Otud7b facilitated Zap70 activation by deubiquitinating Zap70, thus preventing the association of Zap70 with the negative-regulatory phosphatases Sts1 and Sts2. These findings establish Otud7b as a positive regulator of TCR-proximal signaling and T cell activation, highlighting the importance of deubiquitination in regulating Zap70 function. © 2016 Sun et al.