Linear ubiquitinylation, a newly identified post-translational modification, is catalyzed by the linear ubiquitin assembly complex (LUBAC), which is composed of three different subunits, HOIL-1L (heme-oxidized IRP2 ligase 1L), HOIP (HOIL-1 interacting protein), and SHARPIN (SHANK-associated RH domain-interacting protein). LUBAC plays a critical role in the activation of nuclear factor-κB (NF-κB) signaling triggered by a variety of stimuli, including tumor necrosis factor-α (TNF-α), interleukin-1β (IL-1β), and pathogen-derived components, and in the protection from cell death. Loss of function of SHARPIN in mice triggers chronic inflammation in multiple organs including the skin, as well as immunodeficiency. In humans, mutations in the gene encoding HOIL-1L cause chronic hyperinflammation and immunodeficiency, which are both associated with decreased levels of LUBAC. The linear ubiquitinylation activity of LUBAC is indispensable for B-cell function in mice, and hyperactivation of LUBAC is associated with oncogenesis in certain forms of B-cell lymphoma. In this review, the current understanding of the biochemistry of LUBAC-mediated linear ubiquitinylation and its involvement in the immune system are discussed.