The degradation of aggregation-prone tau is regulated by the ubiquitin-proteasome system (UPS) and autophagy, which are impaired in Alzheimers disease (AD) and related tauopathies causing tau aggregation. Protein ubiquitination with linkage specificity determines the fate of proteins that can be either degradative or stabilization signals. While the linear M1-linked ubiquitination on protein aggregates is a signaling hub that recruits various ubiquitin-binding proteins for coordinated actions of protein aggregates turnover and inflammatory NF-kB activation, the deubiquitinase OTULIN counteracts with the M1-linked ubiquitin signaling. However, the exact role of OTULIN on tau aggregate clearance in AD is unknown. Based on our bulk RNA sequence analysis, human inducible pluripotent stem cell (iPSC)-derived neurons (iPSNs) from an individual with late-onset sporadic AD (sAD2.1) show downregulation of ubiquitin ligase activating factors (MAGEA2B and MAGEA) and OTULIN long non-coding RNA (lncRNA-OTULIN) compared to healthy control WTC11 iPSNs. In sAD2.1 iPSNs, downregulated lncRNA-OTULIN is inversely correlated with increased levels of OTULIN protein and phosphorylated tau at p-S202/p-T205 (AT8), p-T231 (AT180), and p-S396/p-S404 (PHF-1). Loss of OTULIN deubiquitinase function using pharmacological inhibitor UC495 or CRISPR-Cas9-mediated OTULIN gene knockout causes a significant reduction of total tau and phosphorylated tau at AT8 epitope in sAD2.1 iPSNs. Whereas in SH-SY5Y neuroblastoma cells, either treating with the UC495 compound or knocking out of the OTULIN gene causes a significant reduction of total tau at both mRNA and protein levels and consequently decreases phosphorylated tau at AT8, AT180, and PHF-1 epitopes. An additional bulk RNA sequence analysis of OUTLIN knockout SH-SY5Y shows a 14-fold down-regulation of tau mRNA levels and differential expression of many other genes associated with autophagy, UPS, NF-kB pathway, and RNA metabolism. Together, our results suggest for the first time a non-canonical function for OTULIN in regulating gene expression and RNA metabolism, which may have a significant pathogenic role in AD and related tauopathies.