NEDD8 is another ubiquitin-like molecule (UBL), which becomes covalently conjugated to a limited number of cellular proteins in a manner analogous to ubiquitination. Human NEDD8 shares 60% amino acid sequence identity to ubiquitin. The only known substrates of NEDD8 modification are the cullin subunits of SCF ubiquitin E3 ligases. The NEDDylation of cullins is critical for the recruitment of E2 to the ligase complex, thus facilitating ubiquitin conjugation. NEDD8 modification has therefore been implicated in cell cycle progression and cytoskeletal regulation.

As with ubiquitin and SUMO, NEDD8 is conjugated to cellular proteins after its C-terminal tail is processed. The NEDD8 activating E1 enzyme is a heterodimer composed of APPBP1 and UBA3 subunits. The APPBP1/UBA3 enzyme has homology to the N- and C-terminal halves of the ubiquitin E1 enzyme, respectively. The UBA3 subunit contains the catalytic center and activates NEDD8 in an ATP-dependent reaction by forming a high-energy thiolester intermediate. The activated NEDD8 is subsequently transferred to the UbcH12 E2 enzyme, and is then conjugated to specific substrates in the presence of the appropriate E3 ligases. There are several different proteases which can remove NEDD8 from protein conjugates. UCHL1, UCHL3 and USP21 proteases have dual specificity for NEDD8 and ubiquitin. Proteases specific for NEDD8 removal are the COP9 signalosome which removes NEDD8 from the CUL1 subunit of SCF ubiquitin ligases, and NEDP1 (or DEN1, SENP8).