Conventional ubiquitination involves the ATP-dependent formation of amide bonds between the ubiquitin C terminus and primary amines in substrate proteins. Recently, SdeA, an effector protein of pathogenic Legionella pneumophila, was shown to mediate NAD-dependent and ATP-independent ubiquitin transfer to host proteins. Here, we identify a phosphodiesterase domain in SdeA that efficiently catalyzes phosphoribosylation of ubiquitin on a specific arginine via an ADP-ribose-ubiquitin intermediate. SdeA also catalyzes a chemically and structurally distinct type of substrate ubiquitination by conjugating phosphoribosylated ubiquitin to serine residues of protein substrates via a phosphodiester bond. Furthermore, phosphoribosylation of ubiquitin prevents activation of E1 and E2 enzymes of the conventional ubiquitination cascade, thereby impairing numerous cellular processes including mitophagy, TNF signaling, and proteasomal degradation. We propose that phosphoribosylation of ubiquitin potently modulates ubiquitin functions in mammalian cells.