Cullin-based E3 ubiquitin ligases are activated through modification of the cullin subunit with the ubiquitin-like protein Nedd8. Dcn1 regulates cullin neddylation and thus ubiquitin ligase activity. Here we describe the 1.9 A X-ray crystal structure of yeast Dcn1 encompassing an N-terminal ubiquitin-binding (UBA) domain and a C-terminal domain of unique architecture, which we termed PONY domain. A conserved surface on Dcn1 is required for direct binding to cullins and for neddylation. The reciprocal binding site for Dcn1 on Cdc53 is located approximately 18 A from the site of neddylation. Dcn1 does not require cysteine residues for catalytic function, and directly interacts with the Nedd8 E2 Ubc12 on a surface that overlaps with the E1-binding site. We show that Dcn1 is necessary and sufficient for cullin neddylation in a purified recombinant system. Taken together, these data demonstrate that Dcn1 is a scaffold-like E3 ligase for cullin neddylation.