Cellular homeostasis is tightly linked to proliferation ensuring that only healthy cells divide. Homeostasis-sensing pathways including mTOR and integrated stress response (ISR) employ phosphorylation to regulate translation initiation and consequently cell cycle progression. Whether ubiquitin or ubiquitin-like molecules impact on translation and proliferation as part of existing or novel pathways is unknown. Here, we combine cell cycle screening, mass spectrometry and ribosome profiling to elucidate the molecular mechanism by which UFMylation, the modification of proteins with ubiquitin-fold modifier 1 molecules, controls translational homeostasis and cell cycle progression. Perturbation of UFMylation prevents eIF4F translation initiation complex assembly and recruitment of the ribosome. The ensuing global translational shutdown is sensed by cyclin D1 and halts the cell cycle independently of canonical ISR and mTOR signaling. Our findings establish UFMylation as a key regulator of translation that employs the principle of conserved cellular sensing mechanisms to couple translational homeostasis to cell cycle progression.