The mechanisms by which ubiquitin ligases are regulated remain poorly understood. Here we describe a series of molecular events that coordinately regulate CHIP, a neuroprotective E3 implicated in protein quality control. Through their opposing activities, the initiator E2, Ube2w, and the specialized deubiquitinating enzyme (DUB), ataxin-3, participate in initiating, regulating, and terminating the CHIP ubiquitination cycle. Monoubiquitination of CHIP by Ube2w stabilizes the interaction between CHIP and ataxin-3, which through its DUB activity limits the length of chains attached to CHIP substrates. Upon completion of substrate ubiquitination, ataxin-3 deubiquitinates CHIP, effectively terminating the reaction. Our results suggest that functional pairing of E3s with ataxin-3 or similar DUBs represents an important point of regulation in ubiquitin-dependent protein quality control. In addition, the results shed light on disease pathogenesis in SCA3, a neurodegenerative disorder caused by polyglutamine expansion in ataxin-3.