Ubiquitination, a fundamental post-translational modification of intracellular proteins, is enzymatically reversed by deubiquitinase enzymes (deubiquitinases). >90 deubiquitinases have been identified. One of these enzymes, YOD1, possesses deubiquitinase activity and is similar to ovarian tumor domain-containing protein 1, which is associated with regulation of the endoplasmic reticulum (ER)-associated degradation pathway. Indeed, YOD1 is reported to be involved in the ER stress response induced by mislocalization of unfolded proteins in mammalian cells. However, it has remained unclear whether YOD1 is associated with pathophysiological conditions such as mitochondrial damage, impaired proteostasis, and neurodegeneration. We demonstrated that YOD1 possesses deubiquitinating activity and exhibits preference for K48- and K63-linked ubiquitin. Furthermore, YOD1 expression levels increased as a result of various stress conditions. We demonstrated that the neurogenic proteins that cause Huntington disease and Parkinson's disease induced upregulation of YOD1 level. We observed that YOD1 reduced disease cytotoxicity through efficient degradation of mutant proteins, whereas this activity was abolished by catalytically inactive YOD1. Additionally, YOD1 localized to Lewy bodies in Parkinson's disease patients. Collectively, these data suggest that the deubiquitinase YOD1 contributes to pathogenesis of neurodegenerative disease by decreasing ubiquitination of abnormal proteins and their subsequent degradation.