The post-translational modification of proteins with ubiquitin represents a complex signalling system that co-ordinates essential cellular functions, including proteolysis, DNA repair, receptor signalling and cell communication. DUBs (deubiquitinases), the enzymes that disassemble ubiquitin chains and remove ubiquitin from proteins, are central to this system. Reflecting the complexity and versatility of ubiquitin signalling, DUB activity is controlled in multiple ways. Although several lines of evidence indicate that aberrant DUB function may promote human disease, the underlying molecular mechanisms are often unclear. Notwithstanding, considerable interest in DUBs as potential drug targets has emerged over the past years. The future success of DUB-based therapy development will require connecting the basic science of DUB function and enzymology with drug discovery. In the present review, we discuss new insights into DUB activity regulation and their links to disease, focusing on the role of DUBs as regulators of cell identity and differentiation, and discuss their potential as emerging drug targets.