Interferon (IFN) signaling induces the expression of interferon-responsive genes and leads to the activation of pathways that are involved in the innate immune response. Ubp43 is an ISG15-specific isopeptidase, the expression of which is activated by IFN. Ubp43 knock-out mice are hypersensitive to IFN-alpha/beta and have enhanced resistance to lethal viral and bacterial infections. Here we show that in addition to protection against foreign pathogens, Ubp43 deficiency increases the resistance to oncogenic transformation by BCR-ABL. BCR-ABL viral transduction/transplantation of wild-type bone marrow cells results in the rapid development of a chronic myeloid leukemia (CML)-like myeloproliferative disease; in contrast, a significantly increased latency of disease development is observed following BCR-ABL viral transduction/transplantation of Ubp43-deficient bone marrow cells. This resistance to leukemic development is dependent on type 1 IFN (IFN-alpha/beta) signaling in Ubp43-deficient cells. Increased levels of type 1 IFN are also detected in the serum of CML mice. These results suggest that inhibition of Ubp43-negative effect on IFN signaling can potentiate the response to increased endogenous IFN levels in innate immune responses against cancer development, indicating that pharmacological inhibition of Ubp43 may be of benefit in cancers and others diseases in which interferon is currently prescribed.