fThe SAGA complex contains two enzymatic modules, which house histone acetyltransferase (HAT) and deubiquitinase (DUB) activities. USP22 is the catalytic subunit of the DUB module, but two adaptor proteins, ATXN7L3 and ENY2, are necessary for DUB activity toward histone H2Bub1 and other substrates. ATXN7L3B shares 74% identity with the N-terminal region of ATXN7L3, but the functions of ATXN7L3B are not known. Here we report that ATXN7L3B interacts with ENY2 but not other SAGA components. Even though ATXN7L3B localizes in the cytoplasm, ATXN7L3B overexpression increases H2Bub1 levels, while overexpression of ATXN7L3 decreases H2Bub1 levels. In vitro, ATXN7L3B competes with ATXN7L3 to bind ENY2, and in vivo, knockdown of ATXN7L3B leads to concomitant loss of ENY2. Unlike the ATXN7L3 DUB complex, a USP22-ATXN7L3B-ENY2 complex cannot deubiquitinate H2Bub1 efficiently in vitro. Moreover, ATXN7L3B knockdown inhibits migration of breast cancer cells in vitro and limits expression of ER target genes. Collectively, our studies suggest that ATXN7L3B regulates H2Bub1 levels and SAGA DUB activity through competition for ENY2 binding. U SP22 and the SAGA deubiquitinase (DUB) module are important for normal embryonic development (1), and alterations in the expression or structure of component proteins are linked to neurodegenerative disease and cancer (2, 3). The DUB module consists of a catalytic subunit, USP22, and two adaptor proteins, ATXN7L3 and ENY2, required for deubiquitinase activity and stability of the DUB module (4-6). Another protein, ATXN7, functions as a bridge to integrate the core DUB module into the greater SAGA complex (7,8) and has also been reported to affect DUB activity (6, 9, 10).ATXN7L3 contains a Sus1/ENY2-binding region in its N-terminal region, a ZnF-Sgf11 domain, and a SCA7 domain in its C-terminal region (6). The presence of ATXN7L3 is essential for the deubiquitinase activity of the DUB module. No stable complex could be formed in the absence of ATXN7L3 (6). Moreover, the ZnF-Sgf11 domain of ATXN7L3 plays a pivotal role in the enzymatic activity, but is dispensable for the assembly, of the DUB module (6). The ZnF-Sgf11 domain of ATXN7L3 is essential for DUB activity toward H2Bub1 in vitro (6). The ZnF-Sgf11 domain is required for ATXN7L3 binding to nucleosomal DNA (11), and the crystal structure of the DUB module reveals that an arginine cluster in the ZnF-Sgf11 domain directly interacts with ubiquitinated nucleosomes and H2A/H2B heterodimer (12).Loss of ATXN7L3B, a paralog of ATXN7L3, may also be associated with neurodegenerative disease (13), as three family members exhibiting loss of chromosome region 12q21, where ATXN7L3B lies, exhibited motor and cognitive deficiencies, as well as learning difficulties and cerebellar ataxia. ATXN7L3B and ATXN7L3 share 74% identity within their N-terminal ϳ60 amino acid residues (Fig. 1A), including the Sus1/ENY2-binding region (Fig. 1A, in red) (6, 14). Interestingly, a truncated form of ATXN7L3 that only contains amino acids 3 to 76 was shown by others to ...