The ubiquitin (Ub) system is centered on conjugation and deconjugation of Ub and Ub-like (Ubls) proteins by a system of ligases and peptidases, respectively. Ub/Ubls contain the beta-grasp fold, also found in numerous proteins with biochemically distinct roles unrelated to the conventional Ub-system. The beta-GF underwent an early radiation spawning at least seven clades prior to the divergence of extant organisms from their last universal common ancestor, first emerging in the context of translation-related RNA-interactions and subsequently exploding to occupy various functional niches. Most beta-GF diversification occurred in prokaryotes, with the Ubl clade showing dramatic expansion in the eukaryotes. Diversification of Ubl families in eukaryotes played a major role in emergence of characteristic eukaryotic cellular sub-structures and systems. Recent comparative genomics studies indicate precursors of the eukaryotic Ub-system emerged in prokaryotes. The simplest of these combine an Ubl and an E1-like enzyme in metabolic pathways. Sampylation in archaea and Urmylation in eukaryotes appear to represent recruitment of such systems as simple protein-tagging apparatuses. However, other prokaryotic systems incorporated further components and mirror the eukaryotic condition in possessing an E2, a RING-type E3 or both of these components. Additionally, prokaryotes have evolved conjugation systems independent of Ub ligases, such as the Pup system.