The breast and ovarian tumor suppressor BRCA1 constitutes a RING heterodimer E3 ligase with BARD1. BRCA1-associated protein 1 (BAP1) is a ubiquitin COOH-terminal hydrolase that was initially identified as a protein that bound to the RING finger domain of BRCA1. However, how BAP1 contributes to the E3 activity of BRCA1/BARD1 is unclear. Here, we report that BAP1 interacts with BARD1 to inhibit the E3 ligase activity of BRCA1/BARD1. Domains comprised by residues 182-365 of BAP1 interact with the RING finger domain of BARD1, and surface plasmon resonance spectroscopy (BIAcore) analyses showed that BAP1 interferes with the BRCA1/BARD1 association. The perturbation resulted in inhibition of BRCA1 autoubiquitination and NPM1/B23 ubiquitination by BRCA1/BARD1. Although BAP1 was capable of deubiquitinating the polyubiquitin chains mediated by BRCA1/BARD1 in vitro, a catalytically inactive mutant of BAP1, C91S, still inhibited the ubiquitination in vitro and in vivo, implicating a second mechanism of action. Importantly, inhibition of BAP1 expression by short hairpin RNA resulted in hypersensitivity of the cells to ionizing irradiation and in retardation of S-phase progression. Together, these results suggest that BAP1 and BRCA1/BARD1 coordinately regulate ubiquitination during the DNA damage response and the cell cycle.