Pseudomonas aeruginosa, an important cause of opportunistic infections in humans, delivers bacterial cytotoxins by type III secretion directly into the host cell cytoplasm, resulting in disruption of host cell signaling and host innate immunity. However, little is known about the fate of the toxins themselves following injection into the host cytosol. Here, we show by both in vitro and in vivo studies that the host ubiquitin ligase Cbl-b interacts with the type III-secreted effector exotoxin T (ExoT) and plays a key role in vivo in limiting bacterial dissemination mediated by ExoT. We demonstrate that, following polyubiquitination, ExoT undergoes regulated proteasomal degradation in the host cell cytosol. ExoT interacts with the E3 ubiquitin ligase Cbl-b and Crk, the substrate for the ExoT ADP ribosyltransferase (ADPRT) domain. The efficiency of degradation is dependent upon the activity of the ADPRT domain. In mouse models of acute pneumonia and systemic infection, Cbl-b is specifically required to limit the dissemination of ExoT-producing bacteria whereas c-Cbl plays no detectable role. To the best of our knowledge, this represents the first identification of a mammalian gene product that is specifically required for in vivo resistance to disease mediated by a type III-secreted effector.