The human cylindromatosis tumor suppressor (HsCyld) has attracted extensive attention due to its association with the development of multiple types of cancer. HsCyld encodes a deubiquitinating enzyme (HsCYLD) with a broad range of functions that include the regulation of several cell growth, differentiation and death pathways. HsCyld is an evolutionarily conserved gene. Homologs of HsCyld have been identified in simple model organisms such as Drosophila melanogaster and Caenorhabditis elegans (C. elegans) which offer extensive possibilities for functional analyses. In the present report we have investigated and compared the functional properties of HsCYLD and its C. elegans homolog (CeCYLD). As expected from the mammalian CYLD expression pattern, the CeCyld promoter is active in multiple tissues with certain gastrointestinal epithelia and neuronal cells showing the most prominent activity. CeCYLD is a functional deubiquitinating enzyme with similar specificity to HsCYLD towards K63- and M1-linked polyubiquiting chains. CeCYLD was capable of suppressing the TRAF2-mediated activation of NF-kappaB and AP1 similarly to HsCYLD. Finally, CeCYLD could suppress the induction of TNF-dependent gene expression in mammalian cells similarly to HsCYLD. Our results demonstrate extensively overlapping functions between the HsCYLD and CeCYLD, which establish the C. elegans protein as a valuable model for the elucidation of the complex activity of the human tumor suppressor protein.