Prokaryotes form ubiquitin (Ub)-like isopeptide bonds on the lysine residues of proteins by at least two distinct pathways that are reversible and regulated. In mycobacteria, the C-terminal Gln of Pup (prokaryotic ubiquitin-like protein) is deamidated and isopeptide linked to proteins by a mechanism distinct from ubiquitylation in enzymology yet analogous to ubiquitylation in targeting proteins for destruction by proteasomes. Ub-fold proteins of archaea (SAMPs, small archaeal modifier proteins) and Thermus (TtuB, tRNA-two-thiouridine B) that differ from Ub in amino acid sequence, yet share a common beta-grasp fold, also form isopeptide bonds by a mechanism that appears streamlined compared with ubiquitylation. SAMPs and TtuB are found to be members of a small group of Ub-fold proteins that function not only in protein modification but also in sulfur-transfer pathways associated with tRNA thiolation and molybdopterin biosynthesis. These multifunctional Ub-fold proteins are thought to be some of the most ancient of Ub-like protein modifiers.