LUBAC (linear ubiquitin chain assembly complex) activates the canonical NF-κB pathway through linear polyubiquitination of NEMO (NF-κB essential modulator, also known as IKKγ) and RIP1. However, the regulatory mechanism of LUBAC-mediated NF-κB activation remains elusive. Here, we show that A20 suppresses LUBAC-mediated NF-κB activation by binding linear polyubiquitin via the C-terminal seventh zinc finger (ZF7), whereas CYLD suppresses it through deubiquitinase (DUB) activity. We determined the crystal structures of A20 ZF7 in complex with linear diubiquitin at 1.70-1.98 Å resolutions. The crystal structures revealed that A20 ZF7 simultaneously recognizes the Met1-linked proximal and distal ubiquitins, and that genetic mutations associated with B cell lymphomas map to the ubiquitin-binding sites. Our functional analysis indicated that the binding of A20 ZF7 to linear polyubiquitin contributes to the recruitment of A20 into a TNF receptor (TNFR) signalling complex containing LUBAC and IκB kinase (IKK), which results in NF-κB suppression. These findings provide new insight into the regulation of immune and inflammatory responses.