The eighth gene discovered, NEDD8, shared approximately 60% amino acid identity with ubiquitin and similarly conjugated to substrates. Analogous to ubiquitylation, the NEDD8 conjugation cascade or neddylation involves E1, E2, E3, and deneddylating enzymes. Like ubiquitin, NEDD8 is first synthesized as a precursor that is processed at the conserved C-terminal Gly76 residue by the hydrolase activity of deneddylating enzymes exposing a glycine-glycine motif that serves as the attachment site for target substrates. NEDD8-specific proteases able to hydrolyze the NEDD8 C-terminus include NEDP1 (also known as DEN1 and SENP8) and UCH-L3, which can also process ubiquitin precursors. The exposed C-terminal glycine of NEDD8 is adenylated by the E1 NEDD8-activating enzyme (NAE), which is composed of NAE1 (APP-BP1) and Uba3 heterodimer, in an ATP-dependent reaction and transferred to E1 cysteine side chain via thiolester linkage. 
Activated NEDD8 is subsequently transferred to the E2 NEDD8-conjugating enzyme, Ubc12, forming another thiolester linkage. Ube2f is another NEDD8 E2, which preferentially promotes neddylation of Cul5. An E3 NEDD8 ligase then transfers NEDD8 to the 3-amino group of lysyl residue on substrates forming an isopeptide bond. NEDD8 E3s contain really interesting novel gene (RING) finger domains, which include Rbx1 and Rbx2 (also known as ROC1 and ROC2, respectively), MDM2, c-CBL, and SCFFBX011 with the sole exception being DCN1. DCN1 does not require any of its cysteines for its catalytic activity; rather DCN1 in conjunction with the yeast Rbx1 homolog, Hrt1, functions synergistically as a dual NEDD8 E3 ligase to promote ligation to Cdc53. NEDD8 can also be linked to ubiquitin chains in vitro. Ubiquitin has also emerged in proteomic studies identifying NEDD8 substrates, although the prevalence of such mixed ubiquitin-NEDD8 chains appears minor.

References

1.Watson IR,et al. Cancer Cell. 2011;19(2):168–176.