Adjustment of Na⁺ balance in extracellular fluids is achieved by regulated Na⁺ transport involving the amiloride-sensitive epithelial Na⁺ channel (ENaC) in the distal nephron. In this context, ENaC is controlled by a number of hormones, including vasopressin, which promotes rapid translocation of water and Na⁺-channels to the plasma membrane and long term effects on transcription of vasopressin-induced and -reduced transcripts (VITs and VRTs). Here, we have identified a mRNA encoding the deubiquitylating enzyme Usp10, whose expression is increased by vasopressin both at the mRNA and the protein level. Co-expression of Usp10 in ENaC transfected Hek293 cells causes a more than 5-fold increase in amiloride-sensitive Na⁺ currents, as measured by whole-cell patch clamping. This is accompanied by a 3 to 4-fold increase in surface expression of - and -ENaC, as shown by cell surface biotinylation experiments. Although ENaC is well known to be regulated by its direct ubiquitylation, Usp10 does not affect the ubiquitylation level of ENaC, suggesting an indirect effect. A two-hybrid screen identified sorting nexin 3 (SNX3) as a novel substrate of Usp10. We show that it is a ubiquitylated protein that is degraded by the proteasome; interaction with Usp10 leads to its deubiquitylation and stabilization. When co-expressed with ENaC, SNX3 increases the channel's cell surface expression, similar to Usp10. In mCCD_cl1 cells, vasopressin increases SNX3 protein, but not mRNA, supporting the idea that the vasopressin induced Usp10 deubiquitylates and stabilizes endogenous SNX3, and consequently promotes cell surface expression of ENaC.