Ubiquitin C-terminal hydrolase L1 (UCH-L1) is a key neuronal deubiquitinating enzyme which is mutated in Parkinson disease (PD) and in childhood-onset neurodegenerative disorder with optic atrophy. Furthermore, reduced UCH-L1 protein levels are associated with a number of neurodegenerative diseases, whereas up-regulation of UCH-L1 protein expression is found in multiple types of cancer. However, very little is known about how UCH-L1 protein level is regulated in cells. Here, we report that UCH-L1 is a novel interactor and substrate of PD-linked E3 ubiquitin-protein ligase parkin. We find that parkin mediates K63-linked polyubiquitination of UCH-L1 in cooperation with the Ubc13/Uev1a E2 ubiquitin-conjugating enzyme complex and promotes UCH-L1 degradation by the autophagy-lysosome pathway. Targeted disruption of parkin gene expression in mice causes a significant decrease in UCH-L1 ubiquitination with a concomitant increase in UCH-L1 protein level in brain, supporting an in vivo role of parkin in regulating UCH-L1 ubiquitination and degradation. Our findings reveal a direct link between parkin-mediated ubiquitin signaling and UCH-L1 regulation, and they have important implications for understanding the roles of these two proteins in health and disease.