Conjugation of ubiquitin-like protein Nedd8 to cullins (neddylation) is essential for the function of cullin-RING ubiquitin ligases (CRLs). Here, we show that neddylation stimulates CRL activity by multiple mechanisms. For the initiator ubiquitin, the major effect is to bridge the approximately 50 A gap between naked substrate and E2 approximately Ub bound to SCF. The gap between the acceptor lysine of ubiquitinated substrate and E2 approximately Ub is much smaller, and, consequentially, the impact of neddylation on transfer of subsequent ubiquitins by Cdc34 arises primarily from improved E2 recruitment and enhanced amide bond formation in the E2 active site. The combined effects of neddylation greatly enhance the probability that a substrate molecule acquires >or= 4 ubiquitins in a single encounter with a CRL. The surprisingly diverse effects of Nedd8 conjugation underscore the complexity of CRL regulation and suggest that modification of other ubiquitin ligases with ubiquitin or ubiquitin-like proteins may likewise have major functional consequences.