The coronavirus papain-like protease (PLpro) is crucial for viral replicase polyprotein processing. Additionally, PLpro can subvert host defense mechanisms by its deubiquitinating (DUB) and deISGylating activities. To elucidate the role of these activities during SARS-CoV-2 infection, we introduced mutations that disrupt binding of PLpro to ubiquitin or ISG15. We identified several mutations that strongly reduced DUB activity of PLpro, without affecting viral polyprotein processing. In contrast, mutations that abrogated deISGylating activity also hampered viral polyprotein processing and when introduced into the virus these mutants were not viable. SARS-CoV-2 mutants exhibiting reduced DUB activity elicited a stronger interferon response in human lung cells. In a mouse model of severe disease, disruption of PLpro DUB activity did not affect lethality, virus replication, or innate immune responses in the lungs. This suggests that the DUB activity of SARS-CoV-2 PLpro is dispensable for virus replication and does not affect innate immune responses in vivo. Interestingly, the DUB mutant of SARS-CoV replicated to slightly lower titers in mice and elicited a diminished immune response early in infection, although lethality was unaffected. We previously showed that a MERS-CoV mutant deficient in DUB and deISGylating activity was strongly attenuated in mice. Here, we demonstrate that the role of PLpro DUB activity during infection can vary considerably between highly pathogenic coronaviruses. Therefore, careful considerations should be taken when developing pan-coronavirus antiviral strategies targeting PLpro.