Bacteraemic pneumonia is a common cause of sepsis in critically ill patients today and is characterized by dysregulation of inflammation. The genetic factors predisposing to bacteraemic pneumonia are not yet fully understood. Innate immunity is pivotal for host defence against invading bacteria, and nuclear factor-kappa B (NF-κB) is central to bacteria-induced inflammation and immune responses. The deubiquitinating enzyme CYLD has been identified as a key negative regulator for NF-κB. In the present study, we investigated the role of CYLD in innate immune response in Escherichia coli pneumonia. Upon E. coli inoculation, Cyld−/− mice were hypersusceptible to E. coli pneumonia with higher mortality. Innate immune response to E. coli was enhanced in Cyld−/− cells and mice. Cyld−/− cells exhibited enhanced NF-κB activation upon E. coli inoculation, and the enhanced NF-κB activation by E. coli was abolished by perturbing IκB kinase (IKK) signalling. Furthermore, IKK inhibitor rescued Cyld−/− mice from lethal infection during E. coli pneumonia along with reduced inflammation. Taken together, these data showed that CYLD acts as a crucial negative regulator for E. coli pneumonia by negatively regulating NF-κB. These findings provide novel insight into the regulation of bacteraemic pneumonia and related diseases and may help develop novel therapeutic strategies for these diseases.