Deubiquitination of NF-kappaB members by CYLD is crucial in controlling the magnitude and nature of cell activation. The role of the naturally occurring CYLD splice variant in dendritic cell (DC) function was analyzed using CYLD(ex7/8) mice, which lack the full-length CYLD (flCYLD) transcript and overexpress the short splice variant (sCYLD). Bone marrow-derived DCs from CYLD(ex7/8) mice display a hyperactive phenotype in vitro and in vivo and have a defect in establishing tolerance with the use of DEC-205-mediated antigen targeting to resting DCs. The combination of sCYLD overexpression and lack of flCYLD in CYLD(ex7/8) DCs leads to enhanced NF-kappaB activity accompanied by an increased nuclear translocation of the IkappaB molecule Bcl-3, along with nuclear p50 and p65. This suggests that, in contrast to flCYLD, sCYLD is a positive regulator of NF-kappaB activity, and its overexpression induces a hyperactive phenotype in DCs.