Coronaviruses encode papain-like proteases (PLpro) that are often multifunctional enzymes with protease activity to process the viral replicase polyprotein and deubiquitinating (DUB)/deISGylating activity, which is hypothesized to modify the innate immune response to infection. Here, we investigate the predicted DUB activity of the PLpro domain of the recently described Middle East Respiratory Syndrome Coronavirus (MERS-CoV). We found that expression of MERS-CoV PLpro reduces the levels of ubiquitinated and ISGylated host cell proteins; consistent with multifunctional PLpro activity. Further, we compared the ability of MERS-CoV PLpro and Severe Acute Respiratory Syndrome Coronavirus (SARS-CoV) PLpro to block innate immune signaling of proinflammatory cytokines. We show that expression of SARS-CoV and MERS-CoV PLpros blocks upregulation of cytokines CCL5, IFN-β and CXCL10 in stimulated cells. Overall these results indicate that the PLpro domains of MERS-CoV and SARS-CoV have the potential to modify the innate immune response to viral infection and contribute to viral pathogenesis.