Different roles for two ubiquitin-like domains of ISG15 in protein modification

ISG15 (interferon-stimulated gene 15) is a novel ubiquitin-like (UbL) modifier with two UbL domains in its architecture. We investigated different roles for the two UbL domains in protein modification by ISG15 (ISGylation) and the impact of Influenza B virus NS1 protein (NS1B) on regulation of the pathway. The results show that, although the C-terminal domain is sufficient to link ISG15 to UBE1L and UbcH8, the N-terminal domain is dispensable in the activation and transthiolation steps but required for efficient E3-mediated transfer of ISG15 from UbcH8 to its substrates. NS1B specifically binds to the N-terminal domain of ISG15 but does not affect ISG15 linkage via a thioester bond to its activating and conjugating enzymes. However, it does inhibit the formation of cellular ISG15 conjugates upon interferon treatment. We propose that the N-terminal UbL domain of ISG15 mainly functions in the ligation step and NS1B inhibits ISGylation by competing with E3 ligases for binding to the N-terminal domain.