Heterochromatin formation in budding yeast is regulated by the silent information regulator (SIR) complex. The SIR complex comprises the NADdependent deacetylase Sir2, the scaffolding protein Sir4, and the nucleosome-binding protein Sir3.Transcriptionally active regions present a challenge to SIR complex-mediated de novo heterochromatic silencing due to the presence of antagonistic histone PTMs, including acetylation and methylation. Methylation of histone H3K4 and H3K79 are dependent on mono-ubiquitination of histone H2B (H2B-Ub). The SIR complex cannot erase H2B-Ub or histone methylation on its own. The deubiquitinase (DUB) Ubp10 is thought to promote heterochromatic silencing by maintaining low H2B-Ub at sub-telomeres. Here, we biochemically characterize the interactions between Ubp10 and the SIR complex machinery. We demonstrate that a direct interaction between Ubp10 and the Sir2/4 sub-complex facilitates Ubp10 recruitment to chromatin via a co-assembly mechanism. Using hydrolyzable H2B-Ub analogs, we show that Ubp10 activity is lower on nucleosomes compared to H2B-Ub in solution. We find that Sir2/4 stimulates Ubp10 DUB activity on nucleosomes, likely through a combination of targeting and allosteric regulation. This coupling mechanism between the silencing machinery and its DUB partner allows erasure of active PTMs and the de novo transition of a transcriptionally active DNA region to a silent chromatin state.