AvrA is a newly described bacterial effector existing in Salmonella. Here, we test the hypothesis that AvrA is a deubiquitinase that removes ubiquitin from two inhibitors of the nuclear factor-kappaB (NF-kappaB) pathway, IkappaBalpha and beta-catenin, thereby inhibiting the inflammatory responses of the host. The role of AvrA was assessed in intestinal epithelial cell models and in mouse models infected with AvrA-deficient and -sufficient Salmonella strains. We also purified AvrA and AvrA mutant proteins and characterized their deubiquitinase activity in a cell-free system. We investigated target gene and inflammatory cytokine expression, as well as effects on epithelial cell proliferation and apoptosis induced by AvrA-deficient and -sufficient bacterial strains in vivo. Our results show that AvrA blocks degradation of IkappaBalpha and beta-catenin in epithelial cells. AvrA deubiquitinates IkappaBalpha, which blocks its degradation and leads to the inhibition of NF-kappaB activation. Target genes of the NF-kappaB pathway, such as interleukin-6, were correspondingly down-regulated during bacterial infection with Salmonella expressing AvrA. AvrA also deubiquitinates and thus blocks degradation of beta-catenin. Target genes of the beta-catenin pathway, such as c-myc and cyclinD1, were correspondingly up-regulated with AvrA expression. Increased beta-catenin further negatively regulates the NF-kappaB pathway. Our findings suggest an important role for AvrA in regulating host inflammatory responses through NF-kappaB and beta-catenin pathways.