The linear ubiquitin chain assembly complex (LUBAC) participates in NF-kappa B activation and cell death protection. Loss of any of the three LUBAC subunits (catalytic HOIP, accessory HOIL-1L, or accessory SHARPIN subunit) leads to distinct phenotypes in mice and human. cpdm mice (chronic proliferative dermatitis in mice [cpdm]) that lack SHARPIN exhibit chronic inflammatory phenotypes, whereas HOIL-1L knockout mice exhibit no overt phenotypes, despite sharing highly homologous ubiquitin-like (UBL) and Npl4 zinc finger (NZF) domains. Here, we intercrossed mice lacking HOIL-1L and SHARPIN and found that reduction of HOIL-1L in cpdm mice exacerbated inflammatory phenotypes without affecting characteristic features of cpdm disease, whereas reduction of SHARPIN in HOIL-1L knockout mice provoked no overt phenotypes. Hence, loss of SHARPIN and reduction of LUBAC triggers cpdm phenotypes. We found that the NZF domain of SHARPIN, but not that of HOIL-1L, is critical for effective protection from programmed cell death by enhancing the recruitment of LUBAC to the activated TNFR complex. The binding activity to K63-linked ubiquitin chains that the NZF domain of SHARPIN, but not that of HOIL-1L, possesses appears to be involved in the recruitment. Thus, selective recognition of ubiquitin chains by NZFs in LUBAC underlies the regulation of LUBAC function.