Since the discovery of ubiquitin in 1975, the poly-ubiquitylation pathway has earned a prominent place in biomedical research as the “garbage disposal” system of the cell. Modification with poly-ubiquitin chains plays an important role in normal protein turnover and also in removing damaged or misfolded proteins. More recently, the elucidation of mono-ubiquitylation of protein substrates has shown additional important roles for ubiquitylation in processes, such as transcriptional regulation, viral budding, and receptor internalization. Intriguingly, this voyage of discovery is now repeating itself with a new generation of ubiquitin-like (ubl) modifiers, such as SUMO and NEDD8. The functional consequences of SUMO and NEDD8 modification are thus beginning to be revealed. A less known member of this ubiquitin-like family is ISG15, a modifier encoded by an interferon-stimulated gene. Recent publications have ascribed important functions for this molecule in various biological pathways from pregnancy to innate immune responses. Furthermore, ISG15 has been found to modify several important molecules and affect type I interferon signal transduction. Here, we review ISG15-related work and highlight important biological questions which need to be posed in order to further elucidate the biological consequences of ISG15 and ISG15 modification.