Loss of the tumour suppressor BRCA1 results in profound chromosomal instability. The fundamental defect underlying this catastrophic phenotype is not yet known. In vivo, BRCA1 forms a heterodimeric complex with BARD1. Both proteins contain an N-terminal zinc RING-finger domain which confers E3 ubiquitin ligase activity. We have isolated full-length human BRCA1/BARD1 complex and have shown that it has a dual E3 ubiquitin ligase activity. First, it mediates the monoubiquitylation of nucleosome core histones in vitro, including the variant histone H2AX that co-localizes with BRCA1 at sites of DNA damage. Secondly, BRCA1/BARD1 catalyses the formation of multiple polyubiquitin chains on itself. Remarkably, this auto-polyubiquitylation potentiates the E3 ubiquitin ligase activity of the BRCA1/BARD1 complex >20-fold. Even though BRCA1 has been reported to associate with a C-terminal ubiquitin hydrolase, BAP1, this enzyme does not appear to function in the deubiquitylation of the BRCA1/BARD1 complex.