The noncanonical IKK family member IKKɛ is essential for regulating antiviral signaling pathways and is a recently discovered breast cancer oncoprotein. Although several IKKɛ targets have been described, direct IKKɛ substrates necessary for regulating cell transformation have not been identified. Here, we performed a screen for putative IKKɛ substrates using an unbiased proteomic and bioinformatic approach. Using a positional scanning peptide library assay, we determined the optimal phosphorylation motif for IKKɛ and used bioinformatic approaches to predict IKKɛ substrates. Of these potential substrates, serine 418 of the tumor suppressor CYLD was identified as a likely site of IKKɛ phosphorylation. We confirmed that CYLD is directly phosphorylated by IKKɛ and that IKKɛ phosphorylates serine 418 in vivo. Phosphorylation of CYLD at serine 418 decreases its deubiquitinase activity and is necessary for IKKɛ-driven transformation. Together, these observations define IKKɛ and CYLD as an oncogene-tumor suppressor network that participates in tumorigenesis.