Ufm1 (ubiquitin-fold modifier 1) is the most recently identified member of the ubiquitin-like protein (UBL) family. We characterized the Ufm1-cascade of the model organism C. elegans in terms of function and analyzed interactions of the involved proteins in vitro and in vivo. Furthermore, we investigated the phenotypes of the deletion mutants uba5(ok3364) (activating enzyme of Ufm1) and ufc1(tm4888) (conjugating enzyme of Ufm1). The viable deletion mutants showed a decrease in reproduction, development, lifespan and a reduced survival under heavy metal stress. However, an increased survival rate under pathogenic, oxidative, heat and endoplasmatic reticulum stress was observed. We propose that the Ufm1-cascade negatively regulates the IRE1-mediated unfolded protein response (UPR).