The SUMO protein is covalently attached to many different substrates throughout the cell. This modification is rapidly reversed by SUMO proteases. The Saccharomyces cerevisiae SUMO protease Ulp2 is a nuclear protein required for chromosome stability and cell cycle restart after checkpoint arrest. Ulp2 is related to the human SENP6 protease, also a nuclear protein. All members of the Ulp2/SENP6 family of SUMO proteases have large but poorly conserved N-terminal domains (NTDs) adjacent to the catalytic domain. Ulp2 also has a long C-terminal domain (CTD). We show that CTD deletion has modest effects on yeast growth, but poly-SUMO conjugates accumulate. In contrast, the NTD is essential for Ulp2 function and is required for nuclear targeting. Two short, widely separated sequences within the NTD confer nuclear localization. Efficient Ulp2 import into the nucleus requires the β-importin Kap95, which functions on classical nuclear-localization signal (NLS)-bearing substrates. Remarkably, replacement of the entire >400-residue NTD by a heterologous NLS results in near-normal Ulp2 function. These data demonstrate that nuclear localization of Ulp2 is crucial in vivo, yet only small segments of the NTD provide the key functional elements, explaining the minimal sequence conservation of the NTDs in the Ulp2/SENP6 family of enzymes.