UFMylation is a crucial post-translational modification discovered a decade ago. The covalent conjugation of UFM1 (UFMylation) to target proteins involves a three-step enzymatic cascade catalyzed sequentially by UFM1-activating enzyme 5 (UBA5, E1), UFM1-conjugating enzyme 1 (UFC1, E2), and UFM1-specific ligase 1 (UFL1, E3). We already found how UBA5 interacts with UFC1 to conjugate UFM1 but we have a poor understanding of how UFM1 is conjugated onto substrates using the E3 ligase. Here we show that largely uncharacterized UFL1 protein is active only when it forms a complex with two other proteins, DDRGK1 and CDK5RAP3. We also used a rebuilding approach to define the minimal complex for protein UFMylation. In summary, our work identifies regulatory principles of this atypical E3 ligase complex.