In analogy to ubiquitin in eukaryotes, the bacterial protein Pup is attached to lysine residues of substrate proteins, thereby targeting them for proteasomal degradation. It has been proposed that, before its attachment, Pup is modified by deamidation of its C-terminal glutamine to glutamate. Here we have identified Dop (locus tag Rv2112) as the specific deamidase of Pup in Mycobacterium tuberculosis. Deamidation requires ATP as a cofactor but not its hydrolysis. Furthermore, we provide experimental evidence that PafA (locus tag Rv2097) ligates deamidated Pup to the proteasomal substrate proteins FabD and PanB. This formation of an isopeptide bond requires hydrolysis of ATP to ADP, suggesting that deamidated Pup is activated for conjugation via phosphorylation of its C-terminal glutamate. By combining these enzymes, we have reconstituted the complete bacterial ubiquitin-like modification pathway in vitro, consisting of deamidation and ligation steps catalyzed by Pup deamidase (Dop) and Pup ligase (PafA).