Toll-like receptor 4 (TLR4) promotes vascular inflammatory disorders such as neointimal hyperplasia and atherosclerosis. TLR4 triggers NFB signaling through the ubiquitin ligase TRAF6 (tumor necrosis factor receptor-associated factor 6). TRAF6 activity can be impeded by deubiquitinating enzymes like ubiquitin-specific protease 20 (USP20), which can reverse TRAF6 autoubiquitination, and by association with the multifunctional adaptor protein -arrestin2. Although -arrestin2 effects on TRAF6 suggest an anti-inflammatory role, physiologic -arrestin2 promotes inflammation in atherosclerosis and neointimal hyperplasia. We hypothesized that anti-and proinflammatory dimensions of -arrestin2 activity could be dictated by -arrestin2's ubiquitination status, which has been linked with its ability to scaffold and localize activated ERK1/2 to signalosomes. With purified proteins and in intact cells, our protein interaction studies showed that TRAF6/USP20 association and subsequent USP20-mediated TRAF6 deubiquitination were -arrestin2-dependent. Generation of transgenic mice with smooth muscle cell-specific expression of either USP20 or its catalytically inactive mutant revealed anti-inflammatory effects of USP20 in vivo and in vitro. Carotid endothelial denudation showed that antagonizing smooth muscle cell USP20 activity increased NFB activation and neointimal hyperplasia. We found that -arrestin2 ubiquitination was promoted by TLR4 and reversed by USP20. The association of USP20 with -arrestin2 was augmented when -arrestin2 ubiquitination was prevented and reduced when -arrestin2 ubiquitination was rendered constitutive. Constitutive -arrestin2 ubiquitination also augmented NFB activation. We infer that pro-and anti-inflammatory activities of -arrestin2 are determined by -arrestin2 ubiquitination and that changes in USP20 expression and/or activity can therefore regulate inflammatory responses, at least in part, by defining the ubiquitination status of -arrestin2.-Arrestin2 (arr2) is an ϳ46-kDa multifunctional scaffolding protein that was discovered originally for its ability to desensitize G protein-mediated signaling evoked by seventransmembrane receptors (7TMRs) 4 (1, 2). However, arr2 modulates the signaling and/or endocytosis of not only most 7TMRs but also of several receptor protein tyrosine kinases, cytokine receptors, ion channel receptors, and the LDL receptor (3, 4). Both the endocytic and signaling functions of arr2 are intertwined with its ubiquitination, which in turn is stimulus-driven and regulated by specific E3 ubiquitin ligases or deubiquitinases (DUBs) (4). arr2 not only undergoes dynamic ubiquitination/deubiquitination but also recruits E3 ubiquitin ligases to other substrates. Indeed, arr2 is integral to the ubiquitination of cell surface receptors, channels, and non-receptor proteins (4, 5). However, thus far there is no clear demonstration that arr2 can scaffold a DUB to specific substrates and affect signal transduction by mediating deubiquitination.A role in deubiquitination c...