Mechanisms of ubiquitination

1) The unique E1 "ubiquitin-activating" enzyme activates ubiquitin by binding it to one of its own cysteins.

2) It then passes ubiquitin onto one among several dozens of E2 "ubiquitin-conjugating" enzymes. Here again, the C-terminus of ubiquitin is bound via a cystein.

3) One among hundreds of E3 "ubiquitin ligase" enzymes transfers ubiquitin to its final protein target. The C-teminus of ubiquitin is linked to the NH2 side chain of a lysine in the target, forming a covalent peptide bond.

4) Because ubiquitin itself contains 7 lysines, it is possible to build chains of ubiquitins onto the target protein. This may require the same or a different E3, and possibly the help of an E4 enzyme.

5) Specialized enzymes known as de-ubiquitinases (DUB) can shorten the chains, or even remove all ubiquitins from the target protein.

Fate of ubiquitinated proteins

Depending on the number of ubiquitin moeties, and on the type of chains (i.e. which one of the 7 lysines in ubiquitin is used to grow the chain), the effect on the target protein may differ widely.

Some chains, mainly those using lysine 48 in ubiquitin, tag the target protein for degradation in the 26S proteasome, as soon as the chain grows beyond 4 ubiquitins.
But other chain types, as well as mono-ubiquitination, can serve to modulate the activity of the target protein.

Source

Getting into position: the catalytic mechanisms of protein ubiquitylation.
by L.A. Passmore & D. Barford
Biochemical Journal 379:513-525 (2004)