By affinity chromatography of a crude reticulocyte extract on ubiquitin-Sepharose, three enzymes required for the conjugation of ubiquitin with proteins have been isolated. One is the ubiquitin-activating enzyme (E1), which is covalently linked to the affinity column in the presence of ATP and can be specifically eluted with AMP and pyrophosphate (Ciechanover, A., Elias, S., Heller, H., and Hershko, A. (1982) J. Biol. Chem. 257, 2537-2542). A second enzyme, designated E2, is bound to the ubiquitin column when E1 and ATP are present, and is eluted with a thiol compound at high concentration. The third enzyme, designated E3, is adsorbed to the affinity column by noncovalent interactions and can be eluted with high salt or increased pH. The presence of all three enzymes is absolutely required for the conjugation of 125I-ubiquitin with proteins. All three affinity-purified enzymes are also required for the breakdown of 125I-albumin to acid-soluble material in the presence of ubiquitin, ATP, and the unadsorbed fraction of the affinity column. The following observations indicate that the function of E2 is the transfer of activated ubiquitin to the site of conjugation in the form of an E2-ubiquitin thiol ester intermediate. (a) E2 is rapidly inactivated by iodoacetamide, but can be protected against inactivation by a prior incubation with E1, ATP, and ubiquitin. This suggests an E1-mediated transfer of activated ubiquitin to an iodoacetamide-sensitive thiol site of E2. (b) The requirements for the binding of E2 to the ubiquitin column and the mode of its elution, cited above, are consistent with the notion that a covalent linkage is formed between E2 and Sepharose-bound ubiquitin. (c) Upon the incubation of 125I-ubiquitin with E1 and ATP, followed by the addition of purified E2, activated ubiquitin is transferred from E1 to several low molecular weight forms of E2, as analyzed by sodium dodecyl sulfate-polyacrylamide gel electrophoresis. The linkage of ubiquitin to all these forms has the characteristics of a thiol ester bond. In a further incubation with E3 and a protein substrate for conjugation, activated ubiquitin was transferred from the different forms of E2-ubiquitin to stable ubiquitin-protein conjugates. Thus, E3 is involved in the last step of the ligase system.