Covalent modification of proteins with ubiquitin is a common regulatory mechanism in eukaryotic cells. Typically, ubiquitinated proteins are targeted for degradation by the 26 S proteasome. However, more recently the ubiquitin signal has also been connected with many other cell processes, including endocytosis, vesicle fusion, DNA repair and transcriptional silencing. Hence ubiquitination may be comparable with phosphorylation in its importance as an intracellular switch, controlling various signal-transduction pathways. Similar to the regulation of the extent of phosphorylation by kinases and phosphatases, specific sets of ubiquitinating/deubiquitinating enzymes control the degree of ubiquitination. A large number of ubiquitin-binding proteins act at different steps in the downstream pathways, followed by the ubiquitinated protein. Different families of ubiquitin-binding proteins have been described. UBA (ubiquitin-associated) domain-containing proteins is the largest family and includes members involved in different cell processes. The smaller groups of UIM (ubiquitin-interacting motif), GAT [GGA (Golgi-associated gamma-adaptin homologous) and Tom1 (target of Myb 1)], CUE (coupling of ubiquitin conjugation to endoplasmic reticulum degradation), UEV [ubiquitin E2 (ubiquitin-conjugating enzyme) variant] and NZF (nuclear protein localization gene 4 zinc finger) domain-containing proteins appear to have more specialized functions. Here we discuss functional and structural properties of ubiquitin-binding proteins.