C-terminal region of USP7/HAUSP is critical for deubiquitination activity and contains a second mdm2/p53 binding site.

USP7, also known as the hepes simplex virus associated ubiquitin-specific protease (HAUSP), deubiquitinates both mdm2 and p53, and plays an important role in regulating the level and activity of p53. Here, we report that deletion of the TRAF-like domain at the N-terminus of USP7, previously reported to contain the mdm2/p53 binding site, has no effect on USP7 mediated deubiquitination of Ub(n)-mdm2 and Ub(n)-p53. Amino acids 208-1102 were identified to be the minimal length of USP7 that retains proteolytic activity, similar to full length enzyme, towards not only a truncated model substrate Ub-AFC, but also Ub(n)-mdm2, Ub(n)-p53. In contrast, the catalytic domain of USP7 (amino acids 208-560) has 50-700 fold less proteolytic activity towards different substrates. Moreover, inhibition of the catalytic domain of USP7 by Ubal is also different from the full length or TRAF-like domain deleted proteins. Using glutathione pull-down methods, we demonstrate that the C-terminal domain of USP7 contains additional binding sites, a.a. 801-1050 and a.a. 880-1050 for mdm2 and p53, respectively. The additional USP7 binding site on mdm2 is mapped to be the C-terminal RING finger domain (a.a. 425-491). We propose that the C-terminal domain of USP7 is responsible for maintaining the active conformation for catalysis and inhibitor binding, and contains the prime side of the proteolytic active site.