Ligation of proteins to ubiquitin requires activation of ubiquitin by E1, the ubiquitin-activating enzyme. Mutant alleles of E1 in mammalian cells have been crucial for dissecting the contribution of the ubiquitin system to cell function. Comparable mutants have been unavailable for Saccharomyces cerevisiae. Here we describe the isolation and characterization of a hypomorphic allele of S. cerevisiae E1. Protein modification by ubiquitin is strongly impaired in the mutant, inhibiting degradation of ubiquitin^proteasome pathway substrates as well as ubiquitin-dependent but proteasome-independent degradation of membrane receptors. This allele will be a useful tool for evaluating the ubiquitin-dependence of cellular processes in yeast, even those in which the proteasome is not involved.