Ubiquitin conjugation is known to target protein substrates primarily to degradation by the proteasome or via the endocytic route. Here we describe a novel protein modification pathway in yeast which mediates the conjugation of RUB1, a ubiquitin-like protein displaying 53% amino acid identity to ubiquitin. We show that RUB1 conjugation requires at least three proteins in vivo. ULA1 and UBA3 are related to the N-and C-terminal domains of the E1 ubiquitin-activating enzyme, respectively, and together fulfil E1-like functions for RUB1 activation. RUB1 conjugation also requires UBC12, a protein related to E2 ubiquitin-conjugating enzymes, which functions analogously to E2 enzymes in RUB1–protein conjugate formation. Conjugation of RUB1 is not essential for normal cell growth and appears to be selective for a small set of substrates. Remarkably, CDC53/cullin, a common subunit of the multifunctional SCF ubiquitin ligase, was found to be a major substrate for RUB1 conjugation. This suggests that the RUB1 conjugation pathway is functionally affiliated to the ubiquitin–proteasome system and may play a regulatory role.