The transcription factor NF-ĸB is a master regulator of the innate immune response and plays a central role in inflammatory diseases by mediating the expression of pro-inflammatory cytokines. Ubiquitination-triggered proteasomal degradation of DNA-bound NF-ĸB strongly limits the expression of its target genes. Conversely, USP7 (deubiquitinase ubiquitin-specific peptidase 7) opposes the activities of E3 ligases, stabilizes DNA-bound NF-ĸB, and thereby promotes NF-ĸB-mediated transcription. Using gene expression and synthetic peptide arrays on membrane support and overlay analyses, we found here that inhibiting USP7 increases NF-ĸB ubiquitination and degradation, prevents Toll-like receptor-induced pro-inflammatory cytokine expression, and represents an effective strategy for controlling inflammation. However, the broad regulatory roles of USP7 in cell death pathways, chromatin, and DNA damage responses limit the use of catalytic inhibitors of USP7 as anti-inflammatory agents. To this end, we identified an NF-ĸB-binding site in USP7, ubiquitin-like domain 2, that selectively mediates interactions of USP7 with NF-ĸB subunits but is dispensable for interactions with other proteins. Moreover, we found that the amino acids LDEL in USP7 critically contribute to the interaction with the p65 subunit of NF-ĸB. Our findings support the notion that USP7 activity could be potentially targeted in a substrate-selective manner through the development of noncatalytic inhibitors of this deubiquitinase to abrogate NF-ĸB activity.