ISG15 is an IFN-inducible ubiquitin-like protein and its expression and conjugation to target proteins are dramatically induced upon viral or bacterial infection. We have generated a UBP43 knockout mouse model that is lacking an ISG15-specific isopeptidase to study the biological role of the protein ISGylation system. We report that UBP43-deficient mice are hypersensitive to LPS-induced lethality and that TIR domain-containing adapter inducing IFN-beta --> IFN regulatory factor 3 --> type I IFN is the major axis to induce protein ISGylation and UBP43 expression in macrophages upon LPS treatment. In ubp43(-/-) macrophages, upon LPS treatment we detected increased expression of IFN-stimulated genes, including genes for several cytokines and chemokines involved in the innate immune response. The ubp43(-/-) mice were able to restrict the growth of Salmonella typhimurium more efficiently than wild-type mice. These results clearly demonstrate two aspects of IFN-signaling, a beneficial effect against pathogens but a detriment to the body without strict control.