Deubiquitinating enzymes (DUBs) remove ubiquitin from conjugated substrates to regulate various cellular processes. The Zn(2+)-dependent DUBs AMSH and AMSH-LP regulate receptor trafficking by specifically cleaving Lys 63-linked polyubiquitin chains from internalized receptors. Here we report the crystal structures of the human AMSH-LP DUB domain alone and in complex with a Lys 63-linked di-ubiquitin at 1.2 A and 1.6 A resolutions, respectively. The AMSH-LP DUB domain consists of a Zn(2+)-coordinating catalytic core and two characteristic insertions, Ins-1 and Ins-2. The distal ubiquitin interacts with Ins-1 and the core, whereas the proximal ubiquitin interacts with Ins-2 and the core. The core and Ins-1 form a catalytic groove that accommodates the Lys 63 side chain of the proximal ubiquitin and the isopeptide-linked carboxy-terminal tail of the distal ubiquitin. This is the first reported structure of a DUB in complex with an isopeptide-linked ubiquitin chain, which reveals the mechanism for Lys 63-linkage-specific deubiquitination by AMSH family members.