Ubiquitin (Ub) is a protein modifier that controls processes ranging from protein degradation to endocytosis, but early-acting regulators of the three-enzyme ubiquitylation cascade are unknown. Here we report that the prenylated membrane-anchored ubiquitin-fold protein (MUB) is an early-acting regulator of subfamily-specific E2 activation. An AtMUB3:AtUBC8 co-crystal structure defines how MUBs inhibit E2∼Ub formation using a combination of E2 backside binding and a MUB-unique lap-bar loop to block E1 access. Since MUBs tether Arabidopsis group VI E2 enzymes (related to HsUbe2D and ScUbc4/5) to the plasma membrane, and inhibit E2 activation at physiological concentrations, they should function as potent plasma membrane localized regulators of Ub chain synthesis in eukaryotes. Our findings define a biochemical function for MUB, a family of highly conserved Ub-fold proteins, and provide an example of selective activation between cognate Ub E2s, previously thought to be constitutively activated by E1s.