Enables UFM1 hydrolase activity and thiolester hydrolase activity. Acts upstream of or within proteolysis. Located in endoplasmic reticulum and nucleus. Is expressed in liver; orbito-sphenoid; pancreas epithelium; and turbinate bone primordium. Human ortholog(s) of this gene implicated in Beukes hip dysplasia. Orthologous to human UFSP2 (UFM1 specific peptidase 2). [provided by Alliance of Genome Resources, Apr 2022]