Interferon gamma (IFN) is the major pro-inflammatory cytokine conferring resistance to the intracellular vacuolar pathogen Toxoplasma gondii. Autophagy along with immunity-related GTPases (IRGs), guanylate binding proteins (GBPs) and the E3 ubiquitin ligase TNF receptor-associated factor 6 (TRAF6) mediate clearance of Toxoplasma in IFN-stimulated cells. With the exception of inflammasomes, no host innate immune mediators impacting host survival have been identified at disrupted parasitophorous vacuoles. We show that IFN drives recruitment of the E3 ubiquitin ligase TRIM21 to GBP1-positive avirulent Toxoplasma vacuoles. This led to Lys63-linked ubiquitination of the vacuole and secretion of pro-inflammatory cytokines. GBPs were ubiquitinated during infection and TRIM21 controlled their expression levels and the efficient recruitment of GBP1 to the vacuole. TRIM21 deficiency led to an enhanced early replication of Toxoplasma without interfering with vacuolar disruption. TRIM21-/- mice were highly susceptible to Toxoplasma infection, exhibiting decreased levels of pro-inflammatory cytokines and higher parasite burden in the brain. This study identifies TRIM21 as a previously unknown modulator of Toxoplasma gondii resistance thereby extending host innate immune recognition of eukaryotic pathogens to include E3 ubiquitin ligases.