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 angstrom 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 similar to 18 angstrom 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.