Conventional ubiquitination involves the ATP-dependent formation of amide bonds between the ubiquitin C-terminus and primary amines in substrate proteins. Recently, SdeA, an effector protein of pathogenic Legionella pneumophila, was shown to mediate NAD-dependent and ATP-independent ubiquitin transfer to host proteins. Yet, the molecular mechanism of this ubiquitination reaction and its relevance for cellular processes remained elusive. Here, we report the identification of a phosphodiesterase (PDE) domain in SdeA that efficiently catalyses arginine phosphoribosylation of ubiquitin via an ADP-ribose intermediate . The PDE domain also catalyzes a chemically and structurally distinct type of substrate ubiquitination by conjugating phosphoribosylated ubiquitin to serine residues of protein substrates via a phosphodiester bond. Furthermore, phosphoribosylation of ubiquitin prevents activation of E1 and E2 enzymes of the conventional ubiquitination cascade thereby diminishing numerous cellular processes including mitophagy, TNF signaling and proteasomal degradation. We propose that phosphoribosylation of ubiquitin is a potent modulator of ubiquitin functions in mammalian cells.