De-ubiquitylating enzymes (DUBs) reverse protein ubiquitylation and thereby control essential cellular functions. Screening for a DUB that counteracts caspase ubiquitylation to regulate cell survival, we identified the Drosophila ovarian tumour-type DUB DUBA (CG6091). DUBA physically interacts with the initiator caspase death regulator Nedd2-like caspase (Dronc) and de-ubiquitylates it, thereby contributing to efficient inhibitor of apoptosis-antagonist-induced apoptosis in the fly eye. Searching also for non-apoptotic functions of DUBA, we found that Duba-null mutants are male sterile and display defects in spermatid individualisation, a process that depends on non-apoptotic caspase activity. Spermatids of DUBA-deficient flies showed reduced caspase activity and lack critical structures of the individualisation process. Biochemical characterisation revealed an obligate activation step of DUBA by phosphorylation. With genetic rescue experiments we demonstrate that DUBA phosphorylation and catalytic activity are crucial in vivo for DUBA function in spermatogenesis. Our results demonstrate for the first time the importance of de-ubiquitylation for fly spermatogenesis.