Ubiquitination is a post-translational modification that regulates many cellular processes in eukaryotes1-4. The conventional ubiquitination cascade culminates in a covalent linkage between the C terminus of ubiquitin (Ub) and a target protein, usually on a lysine side chain1,5. Recent studies of the Legionella pneumophila SidE family of effector proteins revealed a ubiquitination method in which a phosphoribosyl ubiquitin (PR-Ub) is conjugated to a serine residue on substrates via a phosphodiester bond6-8. Here we present the crystal structure of a fragment of the SidE family member SdeA that retains ubiquitination activity, and determine the mechanism of this unique post-translational modification. The structure reveals that the catalytic module contains two distinct functional units: a phosphodiesterase domain and a mono-ADP-ribosyltransferase domain. Biochemical analysis shows that the mono-ADP-ribosyltransferase domain-mediated conversion of Ub to ADP-ribosylated Ub (ADPR-Ub) and the phosphodiesterase domain-mediated ligation of PR-Ub to substrates are two independent activities of SdeA. Furthermore, we present two crystal structures of a homologous phosphodiesterase domain from the SidE family member SdeD 9 in complexes with Ub and ADPR-Ub. The structures suggest a mechanism for how SdeA processes ADPR-Ub to PR-Ub and AMP, and conjugates PR-Ub to a serine residue in substrates. Our study establishes the molecular mechanism of phosphoribosyl-linked ubiquitination and will enable future studies of this unusual type of ubiquitination in eukaryotes.