Ubiquitination is countered by a group of enzymes collectively called deubiquitinases (DUBs) - about 100 of them can be found in the human genome. One of the most interesting aspects of these enzymes is the ability of some members to selectively recognize specific linkage types between ubiquitin in polyubiquitin chains and their endo and exo specificity. The structural basis of exo-specific deubiquitination catalyzed by a DUB is poorly understood. UCH37, a cysteine DUB conserved from fungi to humans, is a proteasome-associated factor that regulates the proteasome by sequentially cleaving polyubiquitin chains from their distal ends, i.e., by exo-specific deubiquitination. In addition to the catalytic domain, the DUB features a functionally uncharacterized UCH37-like domain (ULD), presumed to keep the enzyme in an inhibited state in its proteasome-free form. Herein we report the crystal structure of two constructs of UCH37 from Trichinella spiralis in complex with a ubiquitin-based suicide inhibitor, ubiquitin vinyl methyl ester (UbVME). These structures show that the ULD makes direct contact with ubiquitin stabilizing a highly unusual intra-molecular salt bridge between Lys48 and Glu51 of ubiquitin, an interaction that would be favored only with the distal ubiquitin but not with the internal ones in a Lys48-linked polyubiquitin chain. An inspection of 39 DUB-ubiquitin structures in the protein data bank reveals the uniqueness of the salt bridge in ubiquitin bound to UCH37, an interaction that disappears when the ULD is deleted, as revealed in the structure of the catalytic domain alone bound to UbVME. The structural data are consistent with previously reported mutational data on the mammalian enzyme, which, together with the fact that the ULD residues that bind to ubiquitin are conserved, points to a similar mechanism behind the exo specificity of the human enzyme. To the best of our knowledge, these data provide the only structural example so far of how the exo specificity of a DUB can be determined by its non-catalytic domain. Thus, our data show that, contrary to its proposed inhibitory role, the ULD actually contributes to substrate recognition and could be a major determinant of proteasome-associated function of UCH37. Moreover, our structures show that the unproductively oriented catalytic cysteine in the free enzyme is aligned correctly when ubiquitin binds, suggesting a mechanism for ubiquitin selectivity.